Tooling worked example

Setup Cost with setup time of 1.25 hr: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop setup time to 1.25 hr, then walk the calculation through step by step. Amortize setup labor and machine time across a production batch.

The inputs for this scenario

  • Setup time: 1.25 hr (the input this scenario stresses; the baseline uses 2.5)
  • Setup labor rate: 42 $ / hr (held at the documented default)
  • Machine rate during setup: 65 $ / hr (held at the documented default)
  • Outside / consumable setup cost: 35 $ (held at the documented default)
  • Batch size: 400 parts (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total setup cost = setup time × (labor rate + machine rate) + outside cost.
  • Setup cost per unit works out to 0.42 $ / unit at these inputs, and this is the headline figure for the scenario.
  • Total setup cost works out to 169 $ / run at these inputs.
  • Setup hours works out to 1.25 hr at these inputs.
  • Batch size works out to 400 parts at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where setup time sits at 2.5 hr and the headline result is 0.76 $ / unit, this scenario comes in 44.21% below the baseline at 0.42 $ / unit.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to setup time, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It assumes a single clean setup per run; if you re-fixture partway through or split the batch across machines, the true per-unit setup cost is higher than this single-setup model shows.

Results at a glance

  • Setup cost per unit: 0.42 $ / unit (headline result)
  • Total setup cost: 169 $ / run
  • Setup hours: 1.25 hr
  • Batch size: 400 parts

Run it with your numbers

  • To rerun this with your own numbers, open the live Setup Cost calculator, set setup time to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.