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Downtime Cost Calculator

True cost of an hour of production or system downtime — lost output margin, idle labour, recovery and scrap, overtime to catch up, and penalties — with annual cost at current availability and the value of each percentage point.

Output per hour when running

Contribution margin per unit

Can lost output be made up later?

Idle crew (people)

Loaded wage per person-hour

Overtime premium (if partly recovered)

Restart / ramp-up loss per event (scrap, warm-up, QA)

Downtime events per month

Average duration per event

Scheduled production hours per month

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How it works

Cost/hour = lost contribution (units/h × margin, if output cannot be recovered) or overtime premium (if recovered) + idle labour; cost/event = cost/hour × duration + restart loss; annual = cost/event × events × 12

The cost of downtime depends first on whether the lost output is lost for good. On a bottleneck or sold-out line every idle hour forfeits the contribution margin of the units not made — usually the dominant term. Where output can be recovered on overtime, the cost is the overtime premium plus the idle crew; where there is spare capacity, only the idle labour and fixed overhead remain. On top of the hourly rate each stoppage carries a restart penalty — scrap during warm-up, quality checks, lost cleaning time — which is why many short stops cost more than one long one of the same total duration. Expressing the result per minute and per availability point turns maintenance and reliability spending into a straightforward return calculation.

Worked example

A line making 600 units an hour at $3.20 margin that is not sold out, with an 8-person crew at $34: a stop costs $136 an hour in overtime premium plus $272 idle labour = $408 an hour, plus $900 to restart. Six 1.5-hour events a month cost $9,072 a month — $109,000 a year at 97.8% availability; each availability point (4 hours a month) is worth about $19,600 a year before restart losses.

Frequently asked questions

What about IT or e-commerce downtime?

Use revenue per hour × margin for lost sales (if customers do not return), plus staff idle and recovery cost; SLA penalties and churn are added separately.

Should fixed overhead be included?

Overhead is incurred whether the line runs or not, so it is not an incremental cost of the stop — unless downtime forces you to add capacity or shifts to compensate.

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