How do you calculate the cost of a launch delay?

Multiply days slipped by daily burn by the unrecoverable share, then add fixed penalties. For 30 days at $18,000/day, 70% unrecoverable, plus $45,000 in penalties, the total is $423,000.

What does 'unrecoverable share' mean?

It's the fraction of daily burn you can't claw back. Some delay spending still advances the program (training, debug), so only part is a true loss. At 70%, $378,000 of the $540,000 raw burn counts as lost.

Why is cost per delayed day useful?

It gives a clean threshold for recovery decisions. Here the delay costs $14,100 per day, so any action that pulls the date in for less than $14,100/day of spend is worth doing.

What's a good daily burn figure to use?

Include everything that keeps running while the line sits idle: direct labor held on payroll, leased equipment, allocated facility overhead, and carrying cost on staged inventory. The $18,000/day default reflects a mid-size dedicated line.

Should lost sales be in this number?

Only if you fold them into daily burn or the fixed adder. The base formula captures internal burn and contractual penalties; missed-revenue and market-share effects need to be added explicitly.

Variable vs fixed delay cost — which matters more?

Variable cost ($378,000 here) grows every day you slip, so it drives urgency. Fixed cost ($45,000) is a sunk penalty regardless of recovery. Focus recovery effort on shrinking the variable component.

Production Ramp, Scale-Up & Launch Readiness calculator

Launch Delay Cost Calculator

Launch delay cost quantifies the real money lost when start-of-production (SOP) slips past its committed date. Program managers and operations leaders use it to justify overtime, expedited tooling, or extra headcount by comparing the recovery spend against the cost of doing nothing. The metric separates recurring daily burn — idle line labor, held inventory, allocated overhead — from one-time hits like contractual penalties and air-freight expedites. Because not every dollar of burn is truly lost (some work still advances the program), it applies an unrecoverable share so the number reflects what you actually forfeit.

What this calculator does

Estimate the total exposure when a product launch slips past its committed start-of-production date during ramp-up.
Use it when a ramp milestone is sliding and you need to size what the slip actually costs before approving recovery overtime or accepting a later SOP.
It multiplies days slipped by daily burn and the unrecoverable share, then adds one-time penalty and expedite charges to get total delay cost and cost per delayed day.

Formula used

Launch delay cost = days slipped x daily burn x unrecoverable share + one-time penalty charges
Cost per delayed day = launch delay cost / days slipped

Inputs explained

Days launch slips past SOP date:
Daily burn during the slip:
Share of burn truly unrecoverable:
One-time penalty and expedite charges:

How to use the result

Use it the moment a launch date is at risk to build the business case for recovery actions or to size the financial exposure for leadership.
The unrecoverable share is a judgment call; set it too high and you overstate the loss, too low and you under-fund recovery. Lost-sales and reputational costs are not captured unless folded into daily burn.

Common questions

How do you calculate the cost of a launch delay? Multiply days slipped by daily burn by the unrecoverable share, then add fixed penalties. For 30 days at $18,000/day, 70% unrecoverable, plus $45,000 in penalties, the total is $423,000.
What does 'unrecoverable share' mean? It's the fraction of daily burn you can't claw back. Some delay spending still advances the program (training, debug), so only part is a true loss. At 70%, $378,000 of the $540,000 raw burn counts as lost.
Why is cost per delayed day useful? It gives a clean threshold for recovery decisions. Here the delay costs $14,100 per day, so any action that pulls the date in for less than $14,100/day of spend is worth doing.
What's a good daily burn figure to use? Include everything that keeps running while the line sits idle: direct labor held on payroll, leased equipment, allocated facility overhead, and carrying cost on staged inventory. The $18,000/day default reflects a mid-size dedicated line.
Should lost sales be in this number? Only if you fold them into daily burn or the fixed adder. The base formula captures internal burn and contractual penalties; missed-revenue and market-share effects need to be added explicitly.

Last reviewed 2026-05-12.