| Other Hard Costs | | | |
| Carrying cost for intransit offshored product if paid before shipment |
$0.00 |
$0.22 |
shipment time in years X interest rate X price |
| Carrying cost for inventory on-site |
$1.74 |
$1.83 |
unit price X ( avg. cycle inventory mos. + safety stock mos. + buffer stock mos.) / 12 X carrying cost % |
| Prototype cost |
$0.60 |
$0.40 |
prototype cost/annual units/product life |
| End-of-life inventory |
$3.39 |
$2.75 |
1/12 x unit price x (Delivery time + avg. inventory) x annual quantity/annual quantity/product life |
| Travel: start-up |
$0.33 |
$0.83 |
start-up cost / annual units / vendor life |
| Travel: audit/maintain |
$3.00 |
$9.40 |
annual # of trips X (per trip cost of travel time + expense) / annual units |
| Pick/place into local inventory |
$0.00 |
$1.90 |
(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 |
$11.06 |
$20.34 |
|
| Cumulative Total |
$111.06 |
$46.30 |
|
| Risk | | | |
| Emergency air freight |
$0.00 |
$1.96 |
% air freighted x (unit weight + unit pkg. weight) x air freight rate |
| Rework/quality |
$1.00 |
$0.66 |
unit price X quality cost % |
| Product liability non-recovery risk |
$0.10 |
$0.13 |
unit price X liability risk cost % |
| IP risk |
$0.00 |
$0.00 |
unit price X IP risk cost % |
| Opportunity cost: lost orders, slow response, lost customers |
$0.50 |
$1.10 |
unit price x opportunity risk cost % |
| Economic stability of the supplier |
$1.00 |
$0.11 |
unit price x supplier economic instabiltiy risk |
| Political stability of the supplier |
$1.00 |
$0.11 |
unit price x supplier political instabiltiy risk |
| Total Risk |
$3.60 |
$4.08 |
|
| Cumulative Total |
$114.66 |
$50.38 |
|
