Total Cost of Ownership Estimator™ Results

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Cost FactorU.S.ChinaCalculation Formula
CoGS (Cost of Goods Sold)   
FOB price $440.00 $220.00  
Packaging $17.60 $17.60 unit price x packaging cost %
Duty $0.00 $0.00 duty % x price
Fees: % of price $0.00 $1.56 fee % x price
Fees: flat $0.00 $0.00 fee
Routine surface freight, excluding local $0.00 $34,286.12 % routinely planned for surface freight x (unit weight + packaging weight) X surface freight rate
Routine air freight, excluding local $0.00 $0.00 (1- % routinely planned for surface freight) x (unit weight + packaging weight) X air freight rate
Freight insurance at 0.5% on imported product $0.00 $1.10  
Total CoGS $457.60 $34,526.38  
Other Hard Costs   
Carrying cost for intransit offshored product if paid before shipment $0.00 $1.83 shipment time in years X interest rate X price
Carrying cost for inventory on-site $4.89 $5.50 unit price X ( avg. cycle inventory mos. + safety stock mos. + buffer stock mos.) / 12 X carrying cost %
Prototype cost $0.00 $0.00 prototype cost/annual units/product life
End-of-life inventory $11.24 $8.07 1/12 x unit price x (Delivery time + avg. inventory) x annual quantity/annual quantity/product life
Travel: start-up $0.00 $0.00 start-up cost / annual units / vendor life
Travel: audit/maintain $0.00 $0.00 annual # of trips X (per trip cost of travel time + expense) / annual units
Pick/place into local inventory $13.20 $13.20 (1- % of inventory delivered JIT) x U.S. unit price x pick and place cost as % of U.S. unit price
Purchasing cost, excluding travel $52.80 $52.80 U.S. unit price x purchase cost %
Total Other Hard Costs $82.14 $81.40  
Cumulative Total $539.74 $34,607.78  
Risk   
Emergency air freight $0.00 $171,008.19 % air freighted x (unit weight + unit pkg. weight) x air freight rate
Rework/quality $6.60 $3.30 unit price X quality cost %
Product liability non-recovery risk $8.80 $4.40 unit price X liability risk cost %
IP risk $35.20 $17.60 unit price X IP risk cost %
Opportunity cost: lost orders, slow response, lost customers $5.50 $2.75 unit price x opportunity risk cost %
Economic stability of the supplier $4.40 $2.20 unit price x supplier economic instabiltiy risk
Political stability of the supplier $52.80 $26.40 unit price x supplier political instabiltiy risk
Total Risk $113.30 $171,064.84  
Cumulative Total $653.04 $205,672.62  
Strategic   
Impact on innovation of distance from mfg. $0.00 $0.00 unit price x innovation risk cost %
Impact on product differentiation / mass customization $39.60 $19.80 unit price x commoditization risk cost %
Total Strategic $39.60 $19.80  
Cumulative Total $692.64 $205,692.42  
Green   
Production  
Shipping  
Local Warehouse  
Travel  
Disposal of obsolete inventory  
Total Green $0.00 $0.00  
 
 
 
GRAND TOTAL $692.64 $205,692.42  
5 Year Forecast   
Annual impact of wage inflation and currency appreciation on $ price of product 3.00% 3.90% 0.3 x (wage inflation % + currency appreciation %)