Maintenance · Updated 4 October 2026
Production downtime cost: contribution versus revenue
Estimate event costs without counting recovered production or avoidable costs twice.
Define the stopped production scope
Choose the line, machine or bottleneck whose output was affected. Use the production rate appropriate to the stopped period, not a peak brochure speed. A machine stop and a complete line stop can have different consequences where buffers or alternate routes exist.
Use contribution rather than sales revenue
Contribution per unit means selling price less avoidable variable costs. Those avoided costs were not spent on the units that were never made. Multiplying lost volume by revenue can therefore overstate the loss. Obtain a consistent contribution basis from the responsible finance team rather than inventing a margin.
Account for recovered output
A two-hour stop at 100 units per hour corresponds to 200 units of initial lost output. If half is recovered later, unrecovered output is 100 units. At contribution of 3 per unit, lost contribution is 300. Add the extra cost of recovery separately, such as overtime attributable to making up that output.
Separate the additional costs
For extra repair labor of 50, parts of 100, scrap and restart loss of 20 and recovery expense of 30, total impact is 500. Do not add regular wages as incremental costs unless the event really created an additional expense. Do not include a cost in both the unit contribution and the additional expense list. Record the assumptions, compare periods using the same definitions, and distinguish an event estimate from an annual forecast.