diff --git a/PRODUCTION_READINESS.md b/PRODUCTION_READINESS.md
index 2b74ea3..c22258b 100644
--- a/PRODUCTION_READINESS.md
+++ b/PRODUCTION_READINESS.md
@@ -42,7 +42,7 @@ Cloudflare-specific resource IDs, domains, CORS origins, frontend API URLs, and
 - Document D1 backup, restore, and migration recovery procedures and test a restore.
 - Define health and readiness endpoints that distinguish Worker, D1, auth configuration, and sandbox availability.
 - Add alerts for Worker errors, failed sandbox starts, exhausted container capacity, authentication failures, and abnormal spend.
-- Document capacity limits, expected Cloudflare costs, and safe defaults for session cost/time/step limits.
+- Document capacity limits, expected Cloudflare costs, and safe defaults for session cost/time/step limits. Cost-optimization levers are collected below under "Cost optimization".
 
 ### P1 — security
 
@@ -56,6 +56,75 @@ Cloudflare-specific resource IDs, domains, CORS origins, frontend API URLs, and
 - Add a Cloudflare Deploy button after the scripted deployment path is reliable.
 - Add optional Resend configuration after the core path works without email.
 
+## Cost optimization
+
+Infra-layer levers for one self-hosted Cloudflare deployment, ordered by expected
+impact. Config locations are relative to the repository root; the largest single
+variable cost (LLM inference) is listed at the end for completeness.
+
+### Where the bill comes from today
+
+| Resource | Config | Billing unit | Current setting |
+| --- | --- | --- | --- |
+| Sandbox **Containers** | `packages/worker/wrangler.toml` → `[[containers]]` | vCPU-seconds, GiB-seconds, disk while an instance runs | `instance_type = "standard-3"`, `max_instances = 5`, `sleepAfter = "10m"` override in `packages/worker/src/index.ts`, `keepAlive = true` in `packages/worker/src/sandbox.ts` |
+| **Durable Objects** | `wrangler.toml` → `[[durable_objects.bindings]]` | requests, wall-clock duration, SQLite storage | hibernatable WebSockets already used (`acceptWebSocket` + `serializeAttachment` in `orchestrator.ts`); snapshot append debounced and capped (`orchestrator/event-log-limits.ts`) |
+| **D1** | `wrangler.toml` → `[[d1_databases]]` | rows read/written, storage | sessions/events accumulate; no retention or archival |
+| **R2** | `wrangler.toml` → `[[r2_buckets]]` | storage + Class A/B operations | per-session workspace backups, zstd, 30-day TTL (`src/workspace-cache.ts`) |
+| **Observability** | `wrangler.toml` → `[observability]` + `[observability.traces]` | Workers Logs + trace ingestion | `head_sampling_rate = 1` (100% of routed requests logged and traced) |
+| **Worker + assets** | `wrangler.toml` → `[assets]` | Worker requests + CPU time | `run_worker_first = true`: every static asset fetch is a Worker invocation |
+| **CI** | `.github/workflows/ci.yml` | Actions minutes + container image builds | `pnpm verify` plus a full `Dockerfile.sandbox` build on every PR |
+
+### Levers
+
+1. **Enforce the guards already in schema.** `max_time` is enforced by the
+   orchestrator alarm (default `30m`, `packages/shared/src/config.ts`), but
+   `max_idle_time` (default `10m`, `session-directory.ts`) is persisted and never
+   enforced, and `max_cost`/`max_steps` are legacy schema-compat columns only
+   (`legacyDirectoryGuardColumns()`). Enforcing them in the orchestrator alarm
+   path bounds worst-case container + LLM spend per session — highest impact per
+   unit of effort.
+2. **Containers: right-size and sleep faster.** `standard-3` is the largest
+   instance type configured. Measure peak RSS/CPU for a realistic session before
+   dropping to `standard-2`/`standard-1` (undersizing lengthens runs and can
+   raise LLM spend). Lower `sleepAfter` from `10m` to ~2–5m so idle instances
+   stop accruing CPU/memory. Keep `max_instances = 5` as the hard concurrency
+   cap, use a smaller cap for staging, and clear the keep-alive flag (currently
+   `shouldDeferSandboxActivityExpiry` in `src/sandbox.ts`) when a run blocks on
+   a question or reaches terminal state — not just on timeout.
+3. **Stop billing every asset fetch as a Worker request.** With
+   `run_worker_first = true` the SPA is only reachable through the Worker
+   script. If wrangler 4.x supports path-scoped `run_worker_first`, restrict it
+   to `/api/*`, `/sessions/*`, and WebSocket routes; alternatively serve the SPA
+   from Pages (the deployment already tolerates a separate `CODEVIL_WEB_ORIGIN`,
+   e.g. `codevil-ui.pages.dev`) so static traffic never invokes the Worker.
+4. **Right-size observability sampling.** Drop `head_sampling_rate` to ~0.1 on
+   logs and traces while keeping error paths sampled unconditionally. High-value
+   events (sandbox lifecycle, keep-alive) are logged per event today.
+5. **Retention for D1 and R2.** Add session archival/expiry so old event logs
+   stop growing D1 storage and read rows. Shorten the workspace-backup TTL from
+   30 days (`WORKSPACE_CACHE_TTL_SECONDS`), back up at run end instead of on
+   churn, and add an R2 lifecycle rule.
+6. **Sandbox image and workspace cache.** Trim unused tooling from
+   `Dockerfile.sandbox` (smaller pull, faster cold start, less disk billing).
+   The zstd workspace cache already avoids re-clone/re-install per session —
+   more cache hits mean shorter active container time.
+7. **LLM (adjacent, usually the largest line).** `deepseek-v4-flash` is already
+   the default for plan and exec. Remaining levers: keep flash for planning and
+   escalate exec only when warranted, enable prompt caching, truncate tool
+   output, and compact context.
+
+### Recommended sequence
+
+1. Measure for two weeks with the existing 100% sampling to get a per-resource
+   spend picture before changing anything.
+2. Enforce `max_idle_time`, `max_cost`, and `max_steps`.
+3. Right-size the container, lower `sleepAfter`, scope keep-alive to active runs.
+4. Path-scope `run_worker_first` or move the SPA to Pages.
+5. Add D1/R2 retention and end-of-run backups.
+6. Lower observability sampling.
+7. Re-measure, set abnormal-spend alerts, and evaluate a prepaid commitment once
+   usage is stable.
+
 ## Release gate
 
 A release is production-ready only when a clean Cloudflare account can follow the documented path without editing source files, all automated checks pass, a real session can create a pull request, and backup/restore plus rollback have been exercised.