How to use this calculator
- Enter or choose outage length.
- Enter or choose outages per year.
- Enter or choose revenue per operating hour.
- Enter or choose share of that revenue lost for good.
- Enter or choose staff idled.
- The cost per outage updates as you type. Use Copy result or Share to keep it.
Method
Per outage = Revenue per hour × Hours × Lost% + Staff × Hourly cost × Hours + Backup per hour × Hours + One-off costs; Yearly = Per outage × Outages per year
- Lost%
- share of revenue that is not made up later
- Hourly cost
- fully loaded labour cost per employee hour
Worked example
- Lost revenue: 2,000 × 4 h × 50% = 4,000; idle labour: 10 × 25 × 4 = 1,000.
- Per outage: 4,000 + 1,000 + 0 + 1,500 = 6,500.
- Per year: 6,500 × 3 = 19,500.
Each 4-hour outage costs about 6,500, or 19,500 a year at three outages.
What the result means
Compare the yearly cost with the yearly cost of a backup system (fuel, maintenance and capital spread over its life). If backup keeps you trading, rerun with lost revenue and idle labour set to zero and the backup cost per hour filled in.
Assumptions and limits
- Every outage has the same length and impact.
- Revenue per hour is the average for the hours outages occur.
- Reputational damage, contract penalties and safety risks are not quantified.
Questions
Why not count all revenue as lost?
Some customers simply come back later. Counting only revenue that is never recovered avoids overstating the cost.