Manufacturing Project Portfolio & Capex worked example

Capital Constraint Impact at 63% deferral severity: a worked example

This scenario runs the capital constraint impact calculation on the strong side: 63% deferral severity, with every other input held at its documented default. A capex planner quantifying the cost of an underfunded budget so leadership can weigh raising the capital ceiling.

The inputs for this scenario

  • Projects deferred by the capital ceiling: 8 projects (unchanged)
  • Value lost per deferred project: 75,000 $/project (unchanged)
  • Deferral severity (share of value forfeited): 63 % (raised for this scenario; the documented default is 55)
  • One-time reprioritization cost: 20,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Constraint impact = deferred projects x value lost per project x deferral severity + reprioritization cost) to the inputs above produces each figure below.
  • At this operating point the engine returns 398,000 $ for total capital constraint impact cost, the number this scenario is built around.
  • At this operating point the engine returns 49,750 $ / piece for capital constraint impact cost per unit.
  • At this operating point the engine returns 378,000 $ for variable capital constraint impact cost.
  • At this operating point the engine returns 20,000 $ for fixed capital constraint impact adder.

How this compares with the baseline

  • Against the tool's baseline example, where deferral severity sits at 55% and the headline result is 350,000 $, this scenario comes in 13.71% above the baseline at 398,000 $.
  • Use it during the annual capex cycle or a mid-year freeze, when the approved budget is smaller than the qualified project pipeline and leadership needs the cost of saying no. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total capital constraint impact cost: 398,000 $ (headline result)
  • Capital constraint impact cost per unit: 49,750 $ / piece
  • Variable capital constraint impact cost: 378,000 $
  • Fixed capital constraint impact adder: 20,000 $

Run it with your numbers

  • Every input above is editable in the live Capital Constraint Impact calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.