ERP & MRP Planning worked example

Make or Buy Break Even with supplier buy cost benchmark of 9,300 $: a worked example

This worked example runs the make or buy break even numbers for a tougher week than the baseline: supplier buy cost benchmark of 9,300 $ instead of the typical 18,500 $. Compare supplier buy cost with internal make cost and show the make-versus-buy margin.

The inputs for this scenario

  • Supplier buy cost benchmark: 9,300 $ (the input this scenario stresses; the baseline uses 18,500)
  • Internal make cost estimate: 17,200 $ (held at the documented default)
  • Reference cost basis: 18,500 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Make-or-buy margin = supplier buy cost benchmark - internal make cost estimate.
  • Make-versus-buy cost advantage works out to -42.7 % at these inputs, and this is the headline figure for the scenario.
  • Make-versus-buy cost difference works out to -7,900 $ at these inputs.
  • Supplier buy cost benchmark works out to 9,300 $ at these inputs.
  • Internal make cost estimate works out to 17,200 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where supplier buy cost benchmark sits at 18,500 $ and the headline result is 7.03 %, this scenario comes in 708% below the baseline at -42.7 %.
  • Use it during sourcing reviews, new-part quoting, supplier renegotiations, or when load on a bottleneck cell tempts you to outsource overflow work. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Make-versus-buy cost advantage: -42.7 % (headline result)
  • Make-versus-buy cost difference: -7,900 $
  • Supplier buy cost benchmark: 9,300 $
  • Internal make cost estimate: 17,200 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Make or Buy Break Even calculator, set supplier buy cost benchmark to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.