Tooling allocation and supplier change costs

Evaluate one-time setup, recurring savings and switching costs on an explicit purchase plan.

Work through the task

  1. Identify which tooling, trials and transfer costs are actually charged, their ownership and reuse conditions.
  2. Separate first-order setup from recurring unit and freight costs. Keep the number of planned equivalent deliveries explicit.
  3. Calculate arithmetic break-even, then review qualification, lead time and remaining inventory outside the cost model.

Tools for this job

A worked example

An explicitly entered EUR 600 setup cost and EUR 0.02 recurring saving per equivalent unit reach arithmetic break-even at 30,000 units, assuming unchanged scope and no additional switching costs. This does not certify the alternative supplier.

Use your supplier specification and quotation. These numbers demonstrate the arithmetic; they are not market prices or a packaging suitability assessment.

Checks before you decide

  • Charged setup and ownership
  • Recurring saving on equivalent units
  • Qualification, stock and transfer scope