Computing the True Risk/Reward Ratio for Deferring Maintenance

When planning maintenance budgeting and making important decisions as to the risks associated with deferring maintenance we need a reliable tool to compute the consequences for deferred action. This tool needs to be able to compute the consequences of deferring action not just for direct maintenance breakdown costs but the cost consequences to the whole company to include:

Direct Breakdown Maintenance Costs - This would include the parts and labor to correct a breakdown event.

Indirect Operational Costs - This would include all measurable operations costs to the company incurred because of the breakdown event. Example would be lost man/hours, idled workers, ruined materials, extended rental costs, known lost sales, etc.

Intangible Costs - These costs are more difficult to acquire but are just as important. Examples would be customer dissatisfaction with your performance, lost opportunity, estimated lost sales, legal issues, unwanted attention from regulators, etc.

See White Paper:
Computing the True Risk/Reward Ratio
for Deferring Maintenance

The link below is to a worksheet that I have created that will help you quantify these consequences when making critical operations and maintenance (O&M) decisions.

Worksheet for computing the
True Risk/Reward Ratio for Deferring Maintenance

If you should care to visit concerning the application of this knowledge to your O&M decisions, I am at your service. ~ David Geaslin