Manufacturing Project Portfolio & Capex worked example
Capital Constraint Impact at 40% deferral severity: a worked example
Here is what the math looks like when conditions slip. We hold every other input steady and drop deferral severity to 40%, then walk the calculation through step by step. Estimate the value foregone when a capital budget ceiling forces manufacturing projects to be deferred.
The inputs for this scenario
- Projects deferred by the capital ceiling: 8 projects (held at the documented default)
- Value lost per deferred project: 75,000 $/project (held at the documented default)
- Deferral severity (share of value forfeited): 40 % (the input this scenario stresses; the baseline uses 55)
- One-time reprioritization cost: 20,000 $ (held at the documented default)
Working through the calculation
- The calculation starts from the formula this tool documents: Constraint impact = deferred projects x value lost per project x deferral severity + reprioritization cost.
- Total capital constraint impact cost works out to 260,000 $ at these inputs, and this is the headline figure for the scenario.
- Capital constraint impact cost per unit works out to 32,500 $ / piece at these inputs.
- Variable capital constraint impact cost works out to 240,000 $ at these inputs.
- Fixed capital constraint impact adder works out to 20,000 $ at these inputs.
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 25.71% below the baseline at 260,000 $.
- The practical read: the gap between this scenario and the baseline is entirely attributable to deferral severity, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. Deferral severity is a judgment call — a project merely delayed one quarter loses little value, while a missed market window can lose nearly all of it; garbage severity in, garbage impact out.
Results at a glance
- Total capital constraint impact cost: 260,000 $ (headline result)
- Capital constraint impact cost per unit: 32,500 $ / piece
- Variable capital constraint impact cost: 240,000 $
- Fixed capital constraint impact adder: 20,000 $
Run it with your numbers
- To rerun this with your own numbers, open the live Capital Constraint Impact calculator, set deferral severity to your actual value, and adjust the remaining inputs to match your operation.
Last reviewed 2026-05-12.