Manufacturing Project Portfolio & Capex worked example

Project Contingency Cost at 29% probability-weighted occurrence: a worked example

Suppose probability-weighted occurrence falls to 29%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Size the contingency budget a manufacturing project should carry against its register of identified cost risks.

The inputs for this scenario

  • Identified project risk line items: 12 risks (held at the documented default)
  • Average cost exposure per risk: 8,500 $/risk (held at the documented default)
  • Probability-weighted occurrence: 29 % (the input this scenario stresses; the baseline uses 40)
  • Management reserve floor: 20,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Contingency = risk items x average exposure per risk x occurrence% + management reserve.
  • Total project contingency cost works out to 49,580 $ at these inputs, and this is the headline figure for the scenario.
  • Project contingency cost per unit works out to 4,132 $ / piece at these inputs.
  • Variable project contingency cost works out to 29,580 $ at these inputs.
  • Fixed project contingency cost adder works out to 20,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where probability-weighted occurrence sits at 40% and the headline result is 60,800 $, this scenario comes in 18.45% below the baseline at 49,580 $.
  • It computes a contingency budget from the expected value of identified risks plus a fixed management reserve floor. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total project contingency cost: 49,580 $ (headline result)
  • Project contingency cost per unit: 4,132 $ / piece
  • Variable project contingency cost: 29,580 $
  • Fixed project contingency cost adder: 20,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Project Contingency Cost calculator, set probability-weighted occurrence to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.