What does the promise really cost?
Put the service premium beside the capacity, travel and credits it requires. Then see what a higher-demand month does to the economics.
See the assumptions and arithmetic
Boundary: one monthly SLA tier. The comparison is the same service volume with and without the premium promise. The added costs must be caused by that promise. Ordinary visit labour is included in total contribution but excluded from incremental premium contribution. This is a planning model, not audited profitability or a staffing / queue simulation.
- Incidents = assets × incidents per asset per month. Dispatches = incidents × dispatches per incident.
- Ordinary visit labour = dispatches × (ordinary travel minutes ÷ 60 + on-site hours) × regular loaded hourly cost.
- Reserve cost = additional idle FTE × monthly FTE cost. Do not count productive visit hours again as reserved capacity.
- Extra travel = dispatches × extra minutes ÷ 60 × regular hourly cost.
- Overtime addition = overtime hours × premium above regular pay. These hours must already sit within the visit / travel hours costed at the regular rate.
- Expected credits = incidents × affected-incident percentage ÷ 100 × average credit. Credits are assessed per incident, not per dispatch. This does not model multiple credits per incident, caps or tiers separately; incorporate them in the expected average.
- Added cost = reserve + extra travel + parts positioning + overtime premium + expected credits.
- Incremental contribution = premium revenue − added cost. Break-even premium = added cost ÷ assets.
- Total modelled contribution = base revenue + premium revenue − ordinary visit labour − added cost. Margin uses total revenue; with zero revenue, margin is unavailable.
- Higher-demand scenario changes incident volume, overtime hours and reserved FTE. Prices, dispatches per incident, times, rates, parts positioning and credit probability remain constant. If those change too, revise the inputs and run a separate case.
Exclude overlap between categories. Parts consumed, remote support, vehicles, overhead, tax and financing are outside this model unless explicitly included in the relevant cost assumptions. Negative contribution is a question to investigate, not an automatic instruction to reprice.
Build a service promise you can defend.
SIGNAL connects the contract economics to what dispatchers and technicians actually have to do.