Enter the supplier price and what it costs to make in-house to see which option is cheaper, above what volume and how fast the investment pays back.
Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.
Making spreads investment and fixed costs over volume; buying has a nearly constant cost.
Incremental cost of making (with annualized investment) compared with total cost of buying.
Cash flow of the improvement: investment in year 0 and annual savings escalated at the rate entered, discounted at the MARR.
The report gathers this page's inputs, results, equations, assumptions and references, with fields for project, engineer and revision. In the print dialog, choose Save as PDF.
Compare total cost to buy with the incremental cost to make: only what changes if the part is produced. Add material, energy, extra labor, new fixed costs and annualized investment.
Only if the machine is bought for this part. If you use idle capacity, depreciation and interest already exist and do not change; only the variable part of the rate counts.
Technology know-how, dependence on a single supplier, lead time, quality, intellectual property and focus on the core business.
Important notice: Indus Metrics tools produce estimates and pre-sizing results from the data you enter and from published engineering methods. They do not replace design, calculations or reports signed by a licensed professional engineer (PE), nor verification against the applicable codes, standards and regulations, such as OSHA rules and the ASME codes. Material and fuel properties vary: check manufacturer data or your own process analyses before deciding. By using this site you agree to the Terms of Use.
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