Compare existing delivery capacity with a planned capacity commitment across a monthly booking horizon, including fulfillment lead time and cancellation exposure, to see how much revenue moves forward and whether the added capacity pays back before the horizon ends.
About this interactive
The analysis follows opening backlog and monthly booking cohorts through cancellation exposure, delivery eligibility, and capacity-constrained conversion. Opening backlog is immediately eligible; new bookings become eligible only after the entered lead time. A base case uses existing delivery capacity, while the planned case adds capacity from the entered start month and carries both a one-time activation commitment and recurring monthly cost. The comparison isolates additional in-horizon revenue conversion, cancellations avoided, unused added capacity, contribution gained, payback timing, and the latest start month that remains economically positive inside the entered horizon. No external backlog or capacity benchmark is imposed. For more information, visit our Corporate Finance & Strategy practice.
Monthly conversion
The bars compare monthly conversion under existing capacity and the planned capacity case. The dashed line is the planned monthly delivery ceiling. When the planned bar finishes below that line, lead-time eligibility rather than nominal capacity is limiting conversion.
Cohort timing
Bookings are added at the start of each month, cancellation exposure is applied before conversion, and only eligible cohorts can consume delivery capacity.
Capacity commitment
The decision values compare the revenue moved inside the horizon with the one-time and recurring commitment required to create that capacity. Avoided cancellations remain visible but are not assigned contribution value unless they also convert inside the horizon.
What the interactive shows
BACKLOG CONVERSION BRIDGE: ILLUSTRATIVE DEFAULT RECORD INPUTS Opening backlog: $5,000,000 Month 1 new bookings: $2,500,000 Monthly booking growth: 0.0% Monthly cancellation / reduction rate: 1.0% Booking-to-delivery lead time: 2 months Existing monthly delivery capacity: $2,000,000 Planned added monthly capacity: $750,000 Planned capacity start: Month 2 One-time capacity activation cost: $250,000 Monthly added-capacity cost: $70,000 Contribution margin on converted revenue: 35.0% Analysis horizon: 6 months BASE CASE Total bookings: $15,000,000 Cancellations / reductions: $512,906 Revenue converted: $12,000,000 Ending backlog: $7,487,094 PLANNED CAPACITY CASE Total bookings: $15,000,000 Cancellations / reductions: $452,965 Revenue converted: $14,621,785 Ending backlog: $4,925,250 DECISION ECONOMICS Additional revenue converted inside the horizon: $2,621,785 Cancellations avoided: $59,941 Ending backlog reduction: $2,561,844 Added delivery capacity offered: $3,750,000 Added capacity utilization: 69.9% Incremental contribution from additional conversion: $917,625 Capacity activation + recurring cost: $600,000 Net in-horizon capacity value: $317,625 Payback month: M3 Break-even contribution margin: 22.9% Maximum recurring monthly capacity cost at entered margin: $133,525 Latest start month with non-negative in-horizon value: M5 MONTHLY SCHEDULE M1: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,000,000 | planned capacity $2,000,000 | planned ending backlog $5,425,000 M2: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,750,000 | planned capacity $2,750,000 | planned ending backlog $5,095,750 M3: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,594,542 | planned capacity $2,750,000 | planned ending backlog $4,925,250 M4: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,425,748 | planned capacity $2,750,000 | planned ending backlog $4,925,250 M5: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,425,748 | planned capacity $2,750,000 | planned ending backlog $4,925,250 M6: bookings $2,500,000 | base conversion $2,000,000 | planned conversion $2,425,748 | planned capacity $2,750,000 | planned ending backlog $4,925,250 FINDING The planned capacity addition converts $2,621,785 more backlog inside the six-month horizon than the existing-capacity case and avoids $59,941 of cancellations by reducing the amount of backlog left exposed. Only 69.9% of the added capacity offered is used because booking-to-delivery timing limits eligible backlog after the initial capacity release. At a 35.0% contribution margin, the additional in-horizon conversion contributes $917,625 against $600,000 of activation and recurring capacity cost, leaving $317,625 of net value. The commitment pays back in M3, while starting after M5 no longer produces non-negative value inside the entered horizon. METHOD STATUS Management-entered assumptions. Opening backlog is immediately eligible for delivery. A new booking cohort is added at the start of each month and becomes eligible for conversion after the entered number of full lead-time months. The monthly cancellation / reduction rate is applied to every unconverted cohort before that month’s conversion. Conversion is allocated FIFO from eligible cohorts and cannot exceed that month’s delivery capacity. The base case uses existing capacity only. The planned case adds the entered capacity from the entered start month through the end of the horizon. Activation cost is charged once in the start month and recurring capacity cost is charged in every active month. Incremental contribution equals additional planned-case conversion multiplied by the entered contribution margin. Avoided cancellations are reported separately and are not assigned contribution value unless they also convert inside the horizon. Payback uses cumulative incremental contribution less activation and recurring capacity cost. Break-even margin equals total planned capacity cost divided by additional in-horizon conversion. The latest economic start is solved by rerunning the same planned-capacity decision at every possible start month in the entered horizon. No external backlog, capacity, cancellation, margin, or conversion benchmark is used.
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