Industrial Equipment, Machinery & Capital Goods worked example

Project Margin Leakage at 50% exposure share assigned to project: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop exposure share assigned to project to 50%, then walk the calculation through step by step. Estimate project margin leakage from leakage events, cost per event, exposure share, and fixed unresolved project costs.

The inputs for this scenario

  • Margin leakage events: 16 events (held at the documented default)
  • Average cost per leakage event: 4,200 $ / event (held at the documented default)
  • Exposure share assigned to project: 50 % (the input this scenario stresses; the baseline uses 70)
  • Fixed unresolved project cost: 22,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable project margin leakage = margin leakage events × average cost per leakage event × exposure share assigned to project.
  • Total project margin leakage works out to 55,600 $ at these inputs, and this is the headline figure for the scenario.
  • Average cost per leakage event works out to 3,475 $ / event at these inputs.
  • Variable project margin leakage works out to 33,600 $ at these inputs.
  • Fixed unresolved project cost works out to 22,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where exposure share assigned to project sits at 70% and the headline result is 69,040 $, this scenario comes in 19.47% below the baseline at 55,600 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to exposure share assigned to project, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It treats events as homogeneous around an average cost; a few catastrophic events can be hidden by the mean, so review the event distribution alongside the total.

Results at a glance

  • Total project margin leakage: 55,600 $ (headline result)
  • Average cost per leakage event: 3,475 $ / event
  • Variable project margin leakage: 33,600 $
  • Fixed unresolved project cost: 22,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Project Margin Leakage calculator, set exposure share assigned to project to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.