Downtime Cost Calculator

Other costs of downtime:

• The cost of overtime:

  The previous model only considers the time lost during normal (straight) time, there might be additional costs if the downtime needs to be replaced with overtime.

• The cost of additional inventories:

  Machine downtime also brings higher inventories due to the difficulty of predicting machine availability. The inventories can be work-in-process and/or finished products. Inventory costs can be calculated by considering the opportunity cost of the capital used and calculating the loss from obsolescence and spoilage/breakage.

• The cost of maintenance labor costs:

  Additional maintenance personnel are sometimes used to fix the machines that are down and minimize downtime.

• The loss of revenue:

  In situations where supply exceeds demand for the products and there is no excess capacity, machine downtime can produce a loss of sales. This can be observed when a customer’s order cannot be fulfilled because of the requested delivery date. The additional cost of downtime would be the lost revenue minus the reduced variable costs (energy, materials, etc.)

• The additional costs needed to fix the machine:

  One example is air freight for spare parts needed to repair the machine.