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8/9/2016

TCO Results | Reshoring Initiative

TCO Estimator

Total Cost of Ownership Estimator Results


Created By: A-Team Software & Consulting - Sample TCO
Modify Inputs
Cost Factor
CoGS (Cost of Goods Sold)
FOB price

$25,000.00

$20,000.00

Packaging

$1,250.00

$1,400.00

Duty
Fees: % of price
Fees: at

$0.00
$0.00
$0.00

$898.00
$142.00
$13.33

Routine surface freight, excluding


local

$0.00

$0.00

Routine air freight, excluding local

$0.00

$0.00

$0.00

$100.00

$26,250.00

$22,553.33

$0.00

$133.33

shipment time in years X


interest rate X price
unit price X ( avg. cycle

Carrying cost for inventory on-site

$180.56

$533.33

Prototype cost

$6.67

$11.11

Freight insurance at 0.5% on


imported product
Total CoGS
Other Hard Costs
Carrying cost for intransit offshored
product if paid before shipment

http://www.reshorenow.org/edit-tco-results/1981/

U.S.

Japan

Calculation Formula

unit price x packaging cost


%
duty % x price
fee % x price
fee
% routinely planned for
surface freight x (unit
weight + packaging
weight) X surface freight
rate
(1- % routinely planned for
surface freight) x (unit
weight + packaging
weight) X air freight rate

inventory mos. + safety


stock mos. + buffer stock
mos.) / 12 X carrying cost
%
prototype cost/annual
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8/9/2016

TCO Results | Reshoring Initiative

Prototype cost

$6.67

$11.11

End-of-life inventory

$821.76

$2,000.00

Travel: start-up

$2.67

$10.67

Travel: audit/maintain

$28.00

$100.00

Pick/place into local inventory

$2,500.00

$2,500.00

Purchasing cost, excluding travel

$750.00

$1,000.00

Total Other Hard Costs


Cumulative Total
Risk

$4,289.65
$30,539.65

$6,288.44
$28,841.78

Emergency air freight

$0.00

$0.00

Rework/quality

$500.00

$800.00

Product liability non-recovery risk

$25.00

$80.00

IP risk
Opportunity cost: lost orders, slow
response, lost customers

$125.00

$600.00

$125.00

$300.00

Economic stability of the supplier

$25.00

$100.00

Political stability of the supplier

$25.00

$100.00

Total Risk
Cumulative Total

$825.00
$31,364.65

$1,980.00
$30,821.78

Strategic
Impact on innovation of distance
from mfg.

$0.00

$80.00

$0.00

$50.00

$0.00
$31,364.65

$130.00
$30,951.78

0.00

0.00

0.00

0.00

Impact on product differentiation /


mass customization
Total Strategic
Cumulative Total
Green
Production
Shipping

http://www.reshorenow.org/edit-tco-results/1981/

prototype cost/annual
units/product life
1/12 x unit price x
(Delivery time + avg.
inventory) x annual
quantity/annual
quantity/product life
start-up cost / annual units
/ vendor life
annual # of trips X (per trip
cost of travel time +
expense) / annual units
(1- % of inventory
delivered JIT) x U.S. unit
price x pick and place cost
as % of U.S. unit price
U.S. unit price x purchase
cost %

% air freighted x (unit


weight + unit pkg. weight)
x air freight rate
unit price X quality cost %
unit price X liability risk
cost %
unit price X IP risk cost %
unit price x opportunity
risk cost %
unit price x supplier
economic instabiltiy risk
unit price x supplier
political instabiltiy risk

unit price x innovation risk


cost %
unit price x
commoditization risk cost
%

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Shipping

Local Warehouse
Travel
Disposal of obsolete inventory
Total Green

TCO Results | Reshoring Initiative

0.00

0.00

0.00

0.00

0.00

0.00

$0.00

$0.00

er Costs

0.00

0.00

er Costs

0.00

0.00

er Costs

0.00

0.00

Oth
Oth
Oth

GRAND TOTAL
$31,364.65
5 Year Forecast

Annual impact of wage ination and


currency appreciation on $ price of 1.50%
product

$30,951.78

5.70%

0.3 x (wage ination % +


currency appreciation %)

bmit Changes

Su

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