Total Cost of Ownership Estimator™ Results

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Cost FactorU.S.ChinaCalculation Formula
CoGS (Cost of Goods Sold)   
FOB price $57.70 $36.12  
Packaging $1.44 $0.90 unit price x packaging cost %
Duty $0.00 $5.38 duty % x price
Fees: % of price $0.00 $0.26 fee % x price
Fees: flat $0.00 $0.02 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 $0.27 (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 $0.18  
Total CoGS $59.14 $43.65  
Other Hard Costs   
Carrying cost for intransit offshored product if paid before shipment $0.00 $0.08 shipment time in years X interest rate X price
Carrying cost for inventory on-site $0.33 $1.13 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 $3.49 $6.92 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 $0.10 $0.19 annual # of trips X (per trip cost of travel time + expense) / annual units
Pick/place into local inventory $0.00 $4.11 (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 $0.58 $0.58 U.S. unit price x purchase cost %
Total Other Hard Costs $4.50 $13.01  
Cumulative Total $63.64 $56.66  
Risk   
Emergency air freight $0.00 $0.67 % air freighted x (unit weight + unit pkg. weight) x air freight rate
Rework/quality $1.73 $1.08 unit price X quality cost %
Product liability non-recovery risk $0.00 $0.00 unit price X liability risk cost %
IP risk $0.00 $0.36 unit price X IP risk cost %
Opportunity cost: lost orders, slow response, lost customers $0.58 $1.08 unit price x opportunity risk cost %
Economic stability of the supplier $2.88 $0.00 unit price x supplier economic instabiltiy risk
Political stability of the supplier $1.73 $1.08 unit price x supplier political instabiltiy risk
Total Risk $6.92 $4.28  
Cumulative Total $70.56 $60.94  
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 $70.56 $60.94  
Green   
Production  
Shipping  
Local Warehouse  
Travel  
Disposal of obsolete inventory  
Total Green $0.00 $0.00  
 
 
 
GRAND TOTAL $70.56 $60.94  
5 Year Forecast   
Annual impact of wage inflation and currency appreciation on $ price of product 0.90% 1.58% 0.3 x (wage inflation % + currency appreciation %)