What is Cost of Delay?

Question

Options

• ACost incurred when system integration appears too late in the PI.
• BOpportunity cost and deferred revenue.
• CPenalty for nonperformance.
• DCost of not addressing risk early on.

• A
  88% (36)
• B
  7% (3)
• C
  2% (1)
• D
  2% (1)

Explanation

Important note: The answer key appears to contain an error. Based on SAFe (Scaled Agile Framework) and lean product development, B is the correct answer, not A.

Cost of Delay is the economic impact of postponing the delivery of value - combining opportunity cost (value you could have captured) and deferred revenue (income pushed into the future). It's a core concept from Don Reinertsen, central to SAFe prioritization.

Why each option fares:

• A is incorrect - Late system integration in a PI is a consequence of poor planning, not the definition of Cost of Delay. This describes a scheduling risk, not an economic concept.
• B is correct - Opportunity cost + deferred revenue is exactly what Cost of Delay measures: what you lose economically by waiting.
• C is incorrect - Penalty for nonperformance describes SLA violations or contractual fees, unrelated to delay economics.
• D is incorrect - Not addressing risk early describes technical debt or risk exposure costs, a separate concept.

Memory tip: Think of Cost of Delay as "the meter running while you wait." Every sprint a feature ships late, the clock ticks on revenue and market opportunity you're missing - that's the cost of the delay, not the cost of the work itself.

Recommendation: Verify your answer key source. If this is a SAFe exam (SPC, SP, or POPM), the official answer is B.

No community discussion yet for this question.