All business decision tools
Should you make the component or buy it?
Compare avoidable internal cost and capacity opportunity cost with landed supplier cost.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Annual required units
- 50,000
- Avoidable internal cost / unit
- $8
- Contribution displaced / internal unit
- $2
- Supplier landed quote / unit
- $11
- Annual fixed cost actually avoidable if outsourced
- $25,000
- One-time supplier qualification cost
- $40,000
First-year benefit of buying
Example result only, not a forecast or promise.
- Buy first-year cash cost
- $590,000
- Avoidable internal cash cost
- $425,000
- Internal capacity opportunity value
- $100,000
What to do with this result
Validate supplier quality, continuity and IP exposure; allocated fixed overhead is not automatically avoidable.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
First-year buy advantage = units × (avoidable internal cost + capacity opportunity cost − landed quote) + fixed cost avoidable − transition cost.
Assumptions and limitations
- Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
- Recovered capacity is not booked revenue or automatic cash savings. Validate the bottleneck, quality and demand before monetizing output.