"This order will be late" is not enough to act on. The planner's real question is what the delay will cost, and whether the money spent to prevent it is worth it.
Why delay is measured the wrong way
Indicators such as on-time-in-full (OTIF) say what happened, not what it cost. A planner choosing which of ten at-risk orders to rescue needs a comparison in money, not in percentages.
The cost items
The cost of a delay usually has five parts:
- Contract penalty or price discount
- Expediting costs: express shipping, overtime, alternative supplier premium
- Carrying cost of waiting inventory and work in progress
- Opportunity cost: capacity taken from another order
- Customer relationship risk: loss in repeat-order likelihood
A simple framework
Expected delay cost = probability of delay × (direct costs + indirect costs).
Net benefit of a recovery action = expected cost avoided − cost of the action − harm the action passes on to other orders.
A worked example
Say an order has a 72% probability of delay. Direct costs (penalty and express shipping) are TRY 60,000 and indirect costs TRY 25,000. The expected delay cost is 0.72 × 85,000 = TRY 61,200.
Changing production priority costs TRY 18,400 and cuts the probability of delay to 15%. The new expected cost is 0.15 × 85,000 = TRY 12,750. If no other order is harmed, the net benefit is 61,200 − 12,750 − 18,400 = TRY 30,050. When the same calculation runs for every candidate action, the choice stops being a debate and becomes a comparison.
Know the status of every number
Some of these items are measured (the contract penalty), some estimated (the probability of delay), some assumed (the risk of losing the customer). A good decision shows numbers with their status; a calculation that presents an assumption as a measurement loses trust at the first challenge.
Expressing delay in money turns the question of which order to rescue first from a debate into a comparable decision.
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