Total Cost of Ownership Estimator™ Results

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Cost FactorU.S.ChinaCalculation Formula
CoGS (Cost of Goods Sold)   
FOB price $50.00 $30.00  
Packaging $1.50 $1.20 unit price x packaging cost %
Duty $0.00 $0.00 duty % x price
Fees: % of price $0.00 $0.21 fee % x price
Fees: flat $0.00 $0.02 fee
Routine surface freight, excluding local $0.00 $0.01 % routinely planned for surface freight x (unit weight + packaging weight) X surface freight rate
Routine air freight, excluding local $0.00 $0.25 (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 $0.15  
Total CoGS $51.50 $31.84  
Other Hard Costs   
Carrying cost for intransit offshored product if paid before shipment $0.00 $0.30 shipment time in years X interest rate X price
Carrying cost for inventory on-site $0.90 $1.25 unit price X ( avg. cycle inventory mos. + safety stock mos. + buffer stock mos.) / 12 X carrying cost %
Prototype cost $0.20 $0.13 prototype cost/annual units/product life
End-of-life inventory $2.89 $7.08 1/12 x unit price x (Delivery time + avg. inventory) x annual quantity/annual quantity/product life
Travel: start-up $0.01 $0.01 start-up cost / annual units / vendor life
Travel: audit/maintain $0.54 $2.24 annual # of trips X (per trip cost of travel time + expense) / annual units
Pick/place into local inventory $2.12 $2.50 (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 $0.00 $0.00 U.S. unit price x purchase cost %
Total Other Hard Costs $6.67 $13.51  
Cumulative Total $58.17 $45.35  
Risk   
Emergency air freight $0.00 $0.05 % air freighted x (unit weight + unit pkg. weight) x air freight rate
Rework/quality $4.00 $3.00 unit price X quality cost %
Product liability non-recovery risk $0.00 $0.00 unit price X liability risk cost %
IP risk $0.00 $7.50 unit price X IP risk cost %
Opportunity cost: lost orders, slow response, lost customers $5.00 $6.00 unit price x opportunity risk cost %
Economic stability of the supplier $2.50 $7.50 unit price x supplier economic instabiltiy risk
Political stability of the supplier $2.50 $4.50 unit price x supplier political instabiltiy risk
Total Risk $14.00 $28.55  
Cumulative Total $72.17 $73.90  
Strategic   
Impact on innovation of distance from mfg. $0.00 $0.00 unit price x innovation risk cost %
Impact on product differentiation / mass customization $0.00 $0.00 unit price x commoditization risk cost %
Total Strategic $0.00 $0.00  
Cumulative Total $72.17 $73.90  
Green   
Production  
Shipping  
Local Warehouse  
Travel  
Disposal of obsolete inventory  
Total Green $0.00 $0.00  
 
 
 
GRAND TOTAL $72.17 $73.90  
5 Year Forecast   
Annual impact of wage inflation and currency appreciation on $ price of product 0.00% 0.00% 0.3 x (wage inflation % + currency appreciation %)