The decision
Ridgeline runs two vertical mills on one shift and can’t hire a second-shift operator. Parts weigh up to 35 lb, and most runs are short lots for aerospace and automotive customers.
Three vendors quoted a robotic way to load the mills so they keep cutting after the shop closes. We put the costs on the same footing, recorded what each option does for the company, its programs, its groups and its people, and compared everything with doing nothing.
Current ranking
Where the money goes
Line by line over five years
Year by year
Not everything an investment is worth shows up in dollars. This view records what each option does for the organization, its programs, its groups and its individuals, how we would confirm each claim, and how sure we are.
How much each level counts
What each option does, item by item
Rated 1 to 5. A 3 means no change from today, and doing nothing is a 3 on every item. Each item says how we’d confirm it.
Value that can be put in dollars
These estimates aren’t in the net value unless you count them. Each one is discounted by how sure we are.
A FAIR-style demo
This follows the structure of Open FAIR at small scale: scenarios, how often a threat shows up, how often it becomes a loss, and what one loss costs. Every number here is an illustrative judgment made for the demo. A real engagement runs a full Open FAIR analysis with scoping workshops and calibrated estimates.
Chance of losing more than any amount
Each line shows the chance of losing more than the amount on the horizontal axis, over the years the option is running.
What would reduce it
Tick a control for the option you’d buy it with. The second table shows what each control does to the expected loss and what it costs, measured on its own against no controls.
Controls on the same scenario multiply, so ticking several for one option can differ from adding their separate effects. Their costs and effects are counted in net value only when you also count expected risk loss.
How the number was reached
The formula and the simulation should agree to within about 10%. The simulation also gives the spread of outcomes, which the formula can’t.
Where the estimates came from
Every range below is an illustrative judgment for this demo, not data. Each scenario says what a real analysis would use instead.
What a full Open FAIR analysis adds
- Scoping workshops with the people who run the shop, so each scenario names its asset, threat and effect precisely.
- Calibrated estimates, with the people estimating trained to give honest ranges, and real data wherever it exists: the shop’s logs, insurer loss runs, vendor records and reference calls.
- Loss broken into its forms, such as response, replacement, lost productivity, fines and reputation.
- A sensitivity analysis showing which inputs move the result most, so effort goes to the estimates that matter.
- Documented assumptions and sign-off by the shop’s owner.
- Risk treatment: what each control would cost and how much it would reduce the loss.
The scorecard rates vendor stability, update control, lock-in and documentation as judgments. This model puts dollars on the same concerns, so counting both double counts. If you count risk in net value, consider lowering those weights.
Drag a weight to say how much a criterion matters to Ridgeline. The ranking above updates as you go.
Why these scores
Do nothing is scored 3, neutral, on the criteria that don’t apply to it.
What adding a third mill is worth
Other ways each option can grow
Expansion is modeled on its own and doesn’t change the ranking above. The Expansion path score in the scorecard reflects it.
These are Ridgeline’s own numbers. Lower the hours it can sell and watch the purchases stop paying back.
Value of added hours = hours used × profit per hour × the years the option is running, which start after lead time and installation. Five-year total cost = quote + items not in the quote + the shop’s own time + operating costs + disruption + contingency − resale value. Expansion value covers years 3 to 5 only. Expected risk loss comes from the Risk tab and is subtracted only when you choose to count it.
How this recommendation was made
- We charge a fixed fee of $6,500 for this engagement. It doesn’t change with what Ridgeline buys, or whether it buys.
- We take no commissions, referral fees or reseller margins from any vendor, and we have no preferred vendors.
- The criteria and weights were agreed with Ridgeline before any quote was opened.
- Every vendor got the same requirements, the same questions and the same deadline.
- We disclose any relationship we have with a bidder. In this sample, there are none.
- We keep what can be counted in dollars apart from what can’t, and we mark each estimate with how sure we are.
- We put dollar ranges on the main risks in the style of FAIR, show every input and where it came from, and count the result only when you choose to. A full engagement uses Open FAIR.
- We score doing nothing alongside the vendors, and we don’t recommend an option that loses money over five years on the shop’s own numbers.
- Scores reflect our judgment from the quotes, calls and references. Change the weights to see how much they matter.
Scope for this engagement: three bidders, two rounds of clarifying questions, one written recommendation and a call to walk through it.