Total Cost of Ownership Estimator™ Results

Created By: Sample TCO Form

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Cost FactorU.S.IndiaCalculation Formula
CoGS (Cost of Goods Sold)   
FOB price $100.00 $70.00  
Packaging $1.00 $1.40 unit price x packaging cost %
Duty $0.00 $5.60 duty % x price
Fees: % of price $0.00 $0.50 fee % x price
Fees: flat $0.00 $0.10 fee
Routine surface freight, excluding local $0.00 $0.53 % 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 $0.35  
Total CoGS $101.00 $78.48  
Other Hard Costs   
Carrying cost for intransit offshored product if paid before shipment $0.00 $0.47 shipment time in years X interest rate X price
Carrying cost for inventory on-site $0.82 $2.57 unit price X ( avg. cycle inventory mos. + safety stock mos. + buffer stock mos.) / 12 X carrying cost %
Prototype cost $0.03 $0.12 prototype cost/annual units/product life
End-of-life inventory $2.41 $5.83 1/12 x unit price x (Delivery time + avg. inventory) x annual quantity/annual quantity/product life
Travel: start-up $0.02 $0.07 start-up cost / annual units / vendor life
Travel: audit/maintain $0.08 $0.67 annual # of trips X (per trip cost of travel time + expense) / annual units
Pick/place into local inventory $0.00 $2.00 (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 $2.00 $3.00 U.S. unit price x purchase cost %
Total Other Hard Costs $5.37 $14.72  
Cumulative Total $106.37 $93.20  
Risk   
Emergency air freight $0.00 $0.22 % air freighted x (unit weight + unit pkg. weight) x air freight rate
Rework/quality $1.00 $2.10 unit price X quality cost %
Product liability non-recovery risk $0.10 $0.42 unit price X liability risk cost %
IP risk $0.10 $1.40 unit price X IP risk cost %
Opportunity cost: lost orders, slow response, lost customers $0.50 $1.05 unit price x opportunity risk cost %
Economic stability of the supplier $0.10 $0.35 unit price x supplier economic instabiltiy risk
Political stability of the supplier $0.10 $0.35 unit price x supplier political instabiltiy risk
Total Risk $1.90 $5.89  
Cumulative Total $108.27 $99.08  
Strategic   
Impact on innovation of distance from mfg. $0.00 $0.35 unit price x innovation risk cost %
Impact on product differentiation / mass customization $0.00 $0.35 unit price x commoditization risk cost %
Total Strategic $0.00 $0.70  
Cumulative Total $108.27 $99.78  
Green   
Production  
Shipping  
Local Warehouse  
Travel  
Disposal of obsolete inventory  
Total Green $0.00 $0.00  
 
 
 
GRAND TOTAL $108.27 $99.78  
5 Year Forecast   
Annual impact of wage inflation and currency appreciation on $ price of product 0.60% 4.50% 0.3 x (wage inflation % + currency appreciation %)