Comments on: Calculating Cost of Delay for software projects

By: Hugo Baraúna

Hugo Baraúna — Tue, 08 Nov 2016 15:57:00 +0000

In reply to Lucas Colucci. Approv

By: Lucas Colucci

Lucas Colucci — Tue, 08 Nov 2016 12:57:00 +0000

In reply to rcillo.

Hey nice hearing from you!

So, opportunity cost (OC) is indeed related to cost of delay (CoD), actually, CoD is the quantification of the opportunity cost. 🙂

But let me go a little bit further here… from the http://www.businessdictionary.com/definition/opportunity-cost.html , we have that “every action, choice, or decision has an associated opportunity cost”

Therefore CoD and OC will not always converge.

Imagine that you have a delayed project that will surpass a deadline. In this case, the CoD will not be exactly a quantification of the OC, because you do not have a choice, it is only a quantification of your delay (as the name already suggests it), not an opportunity. It is a fact.

But when we have to choose between two projects, like in the blog post’s example, both CoD and OC will converge.

Is it clearer now? I hope it helped 🙂

By: rcillo

rcillo — Fri, 04 Nov 2016 11:26:00 +0000

I worked at Plataformatec some years ago and I remember that besides delivering great software, we were also taking bigger and bigger responsibilities when helping clients to make better business and product decisions (in the scope of projects and features priorities).

Is this approach somehow related to opportunity cost? https://en.wikipedia.org/wiki/Opportunity_cost