Contract Manufacturing, Job Shop Quoting & Make-to-Order calculator
Customer Concentration Risk Calculator
Use this calculator to rank concentration risk using revenue impact, likelihood of demand or pricing disruption, and difficulty replacing the work in a contract manufacturing or job-shop backlog.
What this calculator does
- Score business risk from dependence on one customer or customer program.
- deciding whether a customer concentration needs pricing discipline, diversification, or capacity limits
- The result is a relative risk score for customer concentration exposure.
Formula used
- customer concentration risk score = customer concentration impact score × concentration disruption likelihood score × replacement difficulty score
- Use the same scoring scale across comparable customer orders, RFQs, and make-to-order jobs.
Inputs explained
- customer concentration impact score: Rate the impact on revenue, cash flow, utilization, margin, and staffing if the customer reduces, delays, or re-sources work.
- concentration disruption likelihood score: Rate likelihood using customer forecast volatility, payment behavior, annual negotiation pressure, program maturity, and competitive sourcing risk.
- replacement difficulty score: Rate how hard it would be to replace the customer volume with similar margin, fit, and capacity utilization.
How to use the result
- Use it to guide diversification, capacity allocation, pricing discipline, credit decisions, and customer negotiation strategy.
- Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.
Common questions
- What is the customer concentration risk calculator for? Use this calculator to rank concentration risk using revenue impact, likelihood of demand or pricing disruption, and difficulty replacing the work in a contract manufacturing or job-shop backlog.
- What information should I enter? Enter severity, occurrence, and detection difficulty using the same 1-10 scoring scale used by estimating, sales, engineering, operations, and finance.
- What does the result tell me? The result is a relative risk score for customer concentration exposure.
- When is the result only an estimate? Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.
Last reviewed 2026-05-12.