#cost-of-delay

Whenever WIP is high, queues are high. When queues are high, jobs in the process generate high delay costs. Most of the damage is caused by high-state queues.

Queues create many forms of economic waste: longer cycle time, increased risk, more variability, more overhead, lower quality, and less motivation.

Cost of delay (COD) determines the financial impact on the company if it releases a product on the market earlier or later. When a product arrives on the market X months earlier, revenues also roll in X months earlier.