Calculator Inputs
Use the form below to estimate true supplier ownership cost for one vendor scenario.
Example Data Table
This sample helps you compare how quoted price can differ from total supplier cost.
| Vendor | Unit Price | Quantity | Freight | Defect % | Lead Time Days | Delay Days |
|---|---|---|---|---|---|---|
| Vendor A | 18.50 | 1200 | 850 | 3.5 | 16 | 2 |
| Vendor B | 19.10 | 1200 | 640 | 1.8 | 11 | 0 |
| Vendor C | 17.90 | 1200 | 980 | 5.2 | 20 | 4 |
Formula Used
Purchase Cost = Quoted Unit Price × Order Quantity
Expected Defective Units = Order Quantity × Defect Rate ÷ 100
Quality Cost = (Expected Defective Units × Rework Cost per Unit) + Return Cost
Lead Time Carrying Cost = Lead Time Days × Inventory Carrying Cost per Day
Delay Cost = Late Delivery Days × Downtime Cost per Day
Total Landed Cost = Purchase + Shipping + Customs + Packaging + Inspection + Quality + Carrying + Delay − Discount
Effective Cost per Good Unit = Total Landed Cost ÷ Expected Good Units
How to Use This Calculator
- Enter the vendor name and your working currency code.
- Fill in quoted unit price and expected order quantity.
- Add logistics and compliance costs such as freight, customs, packaging, and inspection.
- Estimate expected quality losses using defect rate, rework cost, and return cost.
- Enter lead time, daily carrying cost, late days, and downtime exposure.
- Add any early payment discount and a benchmark price for comparison.
- Submit the form to view landed cost, unit economics, variance, and the graph.
- Use the export buttons to save the analysis as CSV or PDF.
FAQs
1. What does this calculator measure?
It estimates total vendor ownership cost, not only quoted price. It combines purchase value, freight, customs, packaging, inspection, defects, carrying cost, delays, and discounts into one view.
2. Why is landed cost different from unit price?
Quoted unit price covers only the direct purchase amount. Landed cost includes all additional sourcing effects that influence real profitability, including logistics, quality issues, and delivery performance.
3. How should I estimate defect rate?
Use recent supplier quality history, inspection records, incoming audit reports, or pilot order results. When uncertain, run several scenarios to test best, expected, and worst outcomes.
4. What is inventory carrying cost per day?
It represents daily cost from tied-up cash, warehousing, insurance, handling, and risk exposure while inventory is in transit or waiting before production use.
5. Why compare against a benchmark unit price?
A benchmark helps show whether a vendor remains competitive after hidden costs are included. It also makes negotiations easier because you can quantify the true gap.
6. Can I use it for local and overseas vendors?
Yes. For local vendors, customs may be zero. For overseas suppliers, freight, duties, lead time, and delay risk usually become more important in the final result.
7. Does the lowest total cost always mean the best vendor?
Not always. You should also review capacity, compliance, service reliability, financial stability, and strategic fit before making a sourcing decision.
8. How often should I update the inputs?
Update inputs whenever quotes, freight rates, defect trends, exchange conditions, or production urgency change. Quarterly reviews are useful even when suppliers appear stable.