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Flow metrics: Difference between revisions
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== Late delivery == | == Late delivery == | ||
We sign a new customer for a project that is expected to take 3 days of work and be billed at 1.000 € per day. The customer agrees with the fixed-price quote we give her. However, we think the project will take us 2 days, so we decide to start the work on day 2. | We sign a new customer for a project that is expected to take 3 days of work and be billed at 1.000 € per day. The customer agrees with the fixed-price quote we give her. However, we think the project will take us 2 days, so we decide to start the work on day 2. | ||
(Note: this is a rational decision because it results in lower effectiveness. You can do that math yourself and see that starting work earlier than strictly results in worse (higher) effectiveness.) | |||
It turns out we were wrong and the work actually takes us 4 days to deliver. The customer is slightly upset, but they added a little buffer for this possibility so they can still use the work. We send the invoice on day 5 and the customer pays the invoice on day 7. | It turns out we were wrong and the work actually takes us 4 days to deliver. The customer is slightly upset, but they added a little buffer for this possibility so they can still use the work. We send the invoice on day 5 and the customer pays the invoice on day 7. | ||
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== Cancellation == | == Cancellation == | ||
We sign a new customer for a project that is expected to take 3 days of work and be billed at 1.000 € per day. The customer needs this work on day 4 because their annual trade show is on day 4. We agree to a contract for guaranteed delivery on day 4 at the latest. We think the project will take us 2 days. We decide to start the work on day 1 because we want a buffer for if we're wrong about the estimate. | |||
It turns out we were very wrong, and the work actually takes us 5 days to deliver. The customer sends us a very angry email, explaining they will never work with us again. As per the contract, the customer does not pay for the work. | |||
(Note: this scenario presumes that we do not stop work on the project once it becomes apparent that it cannot be finished in time. In real-world scenarios, you would stop work once it becomes useless; but you would also generally apply much larger buffers.) | |||
{| class="wikitable" | |||
|+ The metrics behave as follows | |||
|- | |||
! Day !! Effectiveness (€D) !! Reliability (€D) !! Throughput (€) | |||
|- | |||
| 1 || 1.000 || 0 || 0 | |||
|- | |||
| 2 || 2.000 || 0 || 0 | |||
|- | |||
| 3 || 3.000 || 0 || 0 | |||
|- | |||
| 4 || 4.000 || 1.000 || 0 | |||
|- | |||
| 5 || 5.000 || 2.000 || 0 | |||
|- | |||
| 6 || 0 || 0 || 0 | |||
|- | |||
|} | |||
=Relationship Between Metrics= | =Relationship Between Metrics= | ||