Tradeoff triangle

by Admin
Updated: August 4, 2018

The tradeoff triangle illustrates situations where only two of any three properties can be maximized

The tradeoff triangle illustrates the simplest of situations where there are more than two interdependent properties and optimizing any single property has negative implications for at least one of the others (the trade-off).

It’s broadly accepted that better quality costs more.

In business this gives rise to the standard equation of quality vs cost but there are two fundamental types of cost:

  1. Costs that require time: Production time, delivery time, learning and development time.
  2. Costs that do not (or no longer) require time: Materials, money, acquired experience and expertise.

Costs = Time + Assets, where “Assets” are all costs that are not time.

We can now evaluate situations in terms of quality vs time + assets, however, time and assets are to some extent interchangeable, e.g. we can often save time by spending more money, so we now have three properties related to each other...

Quality
Time Assets

... such that:

  • A single property can be improved at the expense of the other two, represented by a vertex/point, e.g. increase in quality costs time & money.
  • Two of the three properties can be improved at the expense of the third, represented by a line, e.g. save time & money at the expense of quality.
  • It is not possible to maximize all properties simultaneously.

The principle can be illustrated by a person standing on a triangular raft: Standing near a point makes it to sink down a little but lifts the other two points higher out of the water. Standing near an makes that side - and its two points sink down a little but moves the opposite point higher out of the water.

Examples

Improving one property at the expense of one/both of the others: In the context of service industries, the price to the customer can be minimized (affordability maximized) if the services are less comprehensive (quality) and/or session duration (time) is reduced.

Improving two properties at the expense of the third: In the context of manufacturing, it is expected that optimizing product quality and delivery time will involve increased costs.

Project management

In the context of project management, the three factors are usually scope (features), resources and schedule. Fixed scope & resources means a minimum time to completion. Fixed time & resources puts a limit on scope. Fixed time & scope requires sufficient resources.

It’s practical

There is no fundamental reason why everything can’t be improved all at once. The principle of the tradeoff triangle is a practical one.

For example, consider a business that manufactures engines and wishes to switch to a new design that has fewer moving parts and is more efficient. Greater efficiency equates to better quality, more simplicity equates to lower costs and faster production. But in practice the process of retooling will take time and money.

Customer facing

When I was first introduced to the tradeoff triangle it was in terms of a triad of customer benefits:

Quality
Service Price

The sentiment was that inexperienced entrepreneurs think they will bring a product to market that is better & cheaper AND provide the best customer service.

In an ideal world this should be possible, but this approach in practice doesn’t allow for adequate focus and rarely succeeds.

More info

“The Antenna Tradeoff Triangle” at antennasys.com provides a good general description with an industry-specific application.

“The cost-quality tradeoff...” at psy.gla.ac.uk has been maintained by Steve Draper since 2008 (updated 2017) and shows how the principle can be expanded.

“Beyond Scope, Schedule, and Cost: Measuring Agile Performance” by Jim Highsmith at blog.cutter.com introduces the Agile Triangle: Value, Quality, and Constraints.

Internal links

The focus dilemma Project planning Go to Articles
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