Formula Used
Converted tier price: Quoted price × exchange rate × future price factor.
All-units purchase cost: Order quantity × converted tier price.
Incremental purchase cost: Sum of units in each tier × that tier's price.
Usable units: Order quantity × batch yield × (1 − scrap rate).
Effective unit cost: Total landed cost ÷ usable units.
Savings percentage: (Reference cost − candidate cost) ÷ reference cost × 100.
Break-even quantity: Difference in fixed costs ÷ difference in variable unit costs.
How to Use This Calculator
- Enter the required order quantity and annual demand.
- Select a pricing method and optimization objective.
- Add every supplier's price-break tiers and commercial charges.
- Enter manufacturing, inventory, overhead, and profit assumptions.
- Calculate and review the recommended supplier and warnings.
- Export the comparison as CSV, PDF, or printout.
Example Data
| Input | Example value | Purpose |
|---|---|---|
| Order quantity | 600 pieces | Tests eligible supplier tiers. |
| Material cost | $2.65 per unit | Builds internal manufacturing cost. |
| Scrap rate | 3% | Reduces usable production output. |
| Holding rate | 18% annually | Measures inventory carrying cost. |
| Optimization goal | Lowest unit cost | Selects the recommended candidate. |
Frequently Asked Questions
What is a quantity price break?
It is a lower quoted price at larger quantities. The total cost may still increase. Inventory costs can remove expected savings.
What is all-units pricing?
The selected tier price applies to every ordered unit. Crossing a threshold can reduce all unit prices. This method creates sharp cost changes.
What is incremental pricing?
Each quantity block uses its own tier price. Earlier units keep earlier prices. The calculator sums every block.
Why include scrap and batch yield?
Not every produced unit becomes saleable. Scrap raises effective unit cost. Yield makes output estimates more realistic.
How is landed cost calculated?
Landed cost includes purchasing and manufacturing charges. Freight, duty, tax, and handling are included. Inventory costs are also added.
Can this compare multiple suppliers?
Yes, use distinct supplier names within tier rows. Each supplier receives an independent calculation. The selected objective ranks candidates.
What does break-even quantity mean?
It estimates where two cost structures become equal. Fixed and variable costs determine the crossover. Negative crossovers are not displayed.
Why can the cheapest quote lose?
Low prices may require larger purchases. Freight and inventory can increase total cost. Lead time can also affect selection.
How does fixed-lot pricing work?
The requested quantity rounds to the pack size. Costs use the rounded billable quantity. Production assumptions still use requested quantity.
Does this replace supplier quotations?
No, it supports planning and comparison. Confirm taxes, duties, and commercial terms. Approved quotations remain the final source.
Can results be exported?
Yes, use the CSV and PDF buttons. Copying and printing are also available. Exports contain the comparison results.