System Redundancy ROI Model

    Community
    00

    Determine if the cost of implementing system redundancy is justified by the potential savings in avoided downtime costs.

    NOTEAbout This Model
    ## Determine if the cost of implementing system redundancy is justified by the potential savings in avoided downtime costs. This model explores how **Net Redundancy Benefit** could play out, depending on Downtime Cost Per Hour, Redundancy Cost Annual, Expected Downtime Hours Per Year. Fixed values: System Lifetime Years. Hit **Run** to see the range of possibilities.
    VARIABLEDowntime Cost Per Hour
    triangular(1000, 5.1e+4, 1.0e+5)
    Includes lost revenue, labor idle time, and potential SLA penalties. Highly variable by industry.
    downtime_cost_per_hour
    VARIABLEExpected Downtime Hours Per Year
    poisson(26)
    Historical or estimated hours the system is unavailable without redundancy.
    expected_downtime_hours_per_year
    CONSTANTSystem Lifetime Years
    5
    The planned operational life of the production system.
    system_lifetime_years
    VARIABLERedundancy Cost Annual
    triangular(5.0e+4, 2.8e+5, 5.0e+5)
    Annualized cost of backup hardware, software licenses, and maintenance.
    redundancy_cost_annual
    FORMULATotal Downtime Cost No Redundancy
    downtime_cost_per_hour * expected_downtime_hours_per_year * system_lifetime_years
    Total cost of downtime without redundancy over the system lifetime.
    total_downtime_cost_no_redundancy
    FORMULATotal Redundancy Cost Investment
    redundancy_cost_annual * system_lifetime_years
    Total cost of implementing redundancy over the system lifetime.
    total_redundancy_cost_investment
    FORMULANet Redundancy Benefit
    total_downtime_cost_no_redundancy - total_redundancy_cost_investment
    The net financial benefit (or loss) of implementing redundancy. Positive means redundancy saves money.
    net_redundancy_benefit
    OUTPUTNet Redundancy Benefit
    net_redundancy_benefit
    Track the net redundancy benefit output

    What is Carlo?

    Carlo is a visual tool for Monte Carlo simulation. Model uncertainty by dragging probability distributions, connecting them visually, and running thousands of scenarios instantly.

    More Operations Models