Cost Of Delay Calculator

Cost Of Delay Formula:

\[ COD = (Lost\ Revenue\ /\ Day) \times Days\ Delayed \]

Cost Of Delay (COD):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Cost Of Delay?

Cost Of Delay (COD) is an economic metric that quantifies the financial impact of project delays by calculating the revenue lost per day multiplied by the number of days the project is delayed. It helps organizations prioritize projects based on their financial urgency.

2. How Does the Calculator Work?

The calculator uses the Cost Of Delay formula:

\[ COD = (Lost\ Revenue\ /\ Day) \times Days\ Delayed \]

Where:

\( Lost\ Revenue\ /\ Day \) — Daily revenue loss due to delay (currency)
\( Days\ Delayed \) — Number of days the project is delayed (days)
\( COD \) — Total Cost Of Delay (currency)

Explanation: The formula calculates the cumulative financial impact of project delays by multiplying the daily revenue loss by the duration of the delay.

3. Importance of COD Calculation

Details: Calculating Cost Of Delay is crucial for project prioritization, resource allocation, and making informed decisions about which projects to accelerate. It provides a quantitative basis for comparing the financial urgency of different initiatives.

4. Using the Calculator

Tips: Enter the daily lost revenue in your local currency and the number of days the project is delayed. Both values must be positive numbers (revenue > 0, days > 0).

5. Frequently Asked Questions (FAQ)

Q1: What constitutes "lost revenue" in COD calculations?
A: Lost revenue includes direct sales impact, market share erosion, penalty fees, and opportunity costs from delayed market entry.

Q2: How accurate are COD estimates?
A: Accuracy depends on the quality of revenue projections. While not exact, COD provides valuable relative comparisons between projects.

Q3: Should COD include indirect costs?
A: For comprehensive analysis, consider including indirect costs like increased operational expenses, customer dissatisfaction, and brand damage.

Q4: How does COD help in agile project management?
A: In agile environments, COD helps prioritize features and projects based on their financial impact, enabling better value delivery sequencing.

Q5: Can COD be negative?
A: Typically no, as delays generally incur costs. However, in rare cases where delay avoids greater costs, the calculation might show avoided losses.