Delivery Decision method

Cost of Delay

Cost of Delay estimates economic loss per unit of time when an option becomes available later.

Cost of Delay is a time-dependent loss, not a generic business-value score. Profile, unit, horizon, assumptions, and range must remain visible.

Core question

What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?

Plan Cost of Delay Method guide

Start comparison

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Participants: 3-8
Time: 90-180 min

Cost of Delay uses a time-dependent delay-cost profile with unit, range, and critical dates. Assessments remain justified and context-bound.

Paper illustration of Cost of Delay with its method-specific working model.

Frame loss
Frame loss
Bound option, beneficiary, loss mechanism, and time unit.
Model profile
Model profile
Model linear, fixed-date, or expedited loss with deadlines and horizon.
Estimate range
Estimate range
Estimate drivers, unit, base value, and range per time unit.
Sequence options
Sequence options
Compare profiles over the actual delivery window and justify sequence.

Update profile and range when market, deadline, or demand changes.

A good fit when

Useful for sequencing decisions with real time effects; remain qualitative without credible drivers.

Ideal for

Portfolio reviews
Scaled Agile setups
Investment committees

Not good for

Very early discovery without a value assumption

Outputs

Cost of Delay profile
Cost of Delay profile with traceable sources, assumptions, and domain decisions.
Decision and review trail
Owners, dates, and next review for Cost of Delay profile.

Cost of Delay profile

Fictional worked example

a time-dependent delay-cost profile with unit, range, and critical dates as a precise working structure with a fictional example.

Cost of Delay profile
Option	Option and effect	Profile	CoD per time	Assumptions	Decision
Contract reportingWorked example	Contract reporting avoids service credits.	Fixed-date from 1 October.	€18k/week; €15–22k.	Contract clause; full rollout at delivery.	Reporting first if delivery slips beyond 1 October.

1. Option and effect
Contract reporting
Contract reporting avoids service credits.
2. Profile
Contract reporting
Fixed-date from 1 October.
3. CoD per time
Contract reporting
€18k/week; €15–22k.
4. Assumptions
Contract reporting
Contract clause; full rollout at delivery.
5. Decision
Contract reporting
Reporting first if delivery slips beyond 1 October.

The example demonstrates the domain logic of Cost of Delay; worksheets remain blank.

Reinertsen: Principles of Product Development Flow

First step

Start with the core question: What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?

Open the method guide

Where to go next?

Agile

WSJF

Uses the cost-of-delay profile as the numerator for WSJF prioritization.

Delivery

MoSCoW

Uses the economic ranking as the basis for a negotiable release cut.

Deep dive

Purpose

Helps clarify scope, order, and delivery flow in concrete terms. It makes work, constraints, and sequence manageable. The result is captured as a Cost of Delay table and prioritization sequence.

How it works

For each initiative, value drivers and time lost are considered together and translated into a comparable order of magnitude. This couples prioritization to economics instead of leaving it hanging on gut feeling or loudness.

In detail

Cost of Delay, often abbreviated as CoD and popularized by Don Reinertsen, expresses how much the organization loses every week or month that an initiative remains unresolved. CoD can be estimated in absolute money terms or as relative profiles. The method forms the economic argument behind WSJF and is central in scaled Agile setups.

Facilitation

Allow relative size estimates instead of forcing false precision. Explain that CoD is rarely linear.

The method guide walks execution through 4 phases, timing, 4 pitfalls, and clear stop criteria.

Open method guide

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Sources and topics

Topics

Prioritization Delivery Economics Decision

Sources

Reinertsen: Principles of Product Development Flowreinertsenassociates.comReinertsen & Associates by Donald Reinertsen; the source of cost-of-delay economics from 'The Principles of Product Development Flow'.

In playbooks

Clarify Prioritization and RoadmapMove from many initiatives to transparent order, scope, and explicit trade-offs.

Artifact templates

Cost of Delay: WorksheetPlan Cost of Delay around its domain steps and the concrete decision question.

markdown

cost-of-delay-working-template.md

Plan Cost of Delay around its domain steps and the concrete decision question.

Cost of Delay: Worksheet

Question

To be confirmed

Desired outcome

To be confirmed

Scope

Full workshop Time: 45–75 minutes

Complete this worksheet on paper or in your own document during the work.

Preparation for this scope

Method setup

Materials: Options and delivery windows, Value or loss drivers, Contract and deadline data, shared workspace, source links, and decision log.
Roles: Product/business · Finance · Sales/Operations · Delivery
Advance information: Collect Options and delivery windows, Value or loss drivers, Contract and deadline data in advance and mark open assumptions.
Overall time needed: 45–75 minutes
Setup: Prepare a time-dependent delay-cost profile with unit, range, and critical dates visibly and calibrate assessment terms before starting.

Prepare for the work steps

Frame loss: Frame loss

Options and delivery windows
Value or loss drivers
Contract and deadline data

Model profile: Model profile

loss hypothesis
Value or loss drivers
Contract and deadline data

Estimate range: Estimate range

CoD profile
Value or loss drivers
Contract and deadline data

Sequence options: Sequence options

CoD range
Value or loss drivers
Contract and deadline data

Cost of Delay profile

Option	Option · beneficiary · loss path	Shape · deadline · horizon	Unit · base · range	Source · uncertainty · dependency	Delivery window · cumulative loss · sequence
Contract reporting

Contract reporting: Worked example

Enter only real input, sources, and decisions.

Reinertsen: Principles of Product Development Flow

Frame loss: Frame loss

Expected artifact: loss hypothesis

loss hypothesis · source · uncertainty · next decision

Entry:

...

Is the path from delay to loss traceable?

Model profile: Model profile

Expected artifact: CoD profile

CoD profile · source · uncertainty · next decision

Entry:

...

Does the shape fit contract, demand, or risk?

Estimate range: Estimate range

Expected artifact: CoD range

CoD range · source · uncertainty · next decision

Entry:

...

Are assumptions and uncertainty visible beside the value?

Sequence options: Sequence options

Expected artifact: sequence decision

sequence decision · source · uncertainty · next decision

Entry:

...

Was loss considered over the relevant delay duration?

Open questions and next steps

...

Method guide: https://methodatlas.meierhoff-systems.de/en/methods/cost-of-delay/run-sheet

Alternatives and neighbors

Fitting alternatives with decision guidance, followed by other related methods.

All methods

Agile

WSJF

Instead of Cost of Delay, choose WSJF when you want to balance priorities through cost of delay and job size.

Product Strategy

ICE Scoring

Moves target group, value, goals, and priorities toward a concrete result through "prepare the idea backlog", "define scales for I, C, and E", and "select top ideas for testing or building".

Delivery

Monte Carlo Forecasting

Moves scope, sequence, and delivery flow toward a concrete result through "formulate the forecast question", "choose historical flow data", and "update the forecast regularly".