In my company I could apply this to our potential projects by thinking of our variable costs as the hours charged by consultants to the projects they are working on, each additional billable hour that is produced will add incrementally to our cost so it is variable. However, the space they are working in and their laptops cost the same whether they are producing 1 billable hour or 400 – these would be fixed costs.
How would you mitigate risk in this situation?