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SummaryReinertsen’s simple economic model is based on four drivers:
Some more food for thought from Reinertsen’s “Managing The Design Factory”
From a life-cycle Profit and Loss statement you can work out the economic impact of failing to achieve the different drivers, i.e. is it worth delaying the project for a month to include this feature?
Another model he proposes is the “Application Economic Model” which tries to understand how product attributes affect customer economics. The outcome are rules like “if we increase the purchase price by x, but we manage to decrease downtime to y, it’s still worth it for the customer”.His milestones look similar to this:
Variablity means you can only choose which on will be variable.