Make-Buy, Outsourcing & Network Design worked example

Contract Manufacturing Comparison at 58% share of volume actually moved to cm: a worked example

Suppose share of volume actually moved to cm falls to 58%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimates the annual landed cost of routing a program to a contract manufacturer including piece price, the realistic share of volume shifted, and one-time transfer fees.

The inputs for this scenario

  • Annual units placed with contract manufacturer: 50,000 units/yr (held at the documented default)
  • CM all-in price per unit: 12.5 $/unit (held at the documented default)
  • Share of volume actually moved to CM: 58 % (the input this scenario stresses; the baseline uses 80)
  • Tooling transfer and qualification fee: 45,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Annual CM spend = units x CM piece price x outsourced share + transfer fee.
  • Total contract manufacturing comparison cost works out to 407,500 $ at these inputs, and this is the headline figure for the scenario.
  • Contract manufacturing comparison cost per unit works out to 8.15 $ / piece at these inputs.
  • Variable contract manufacturing comparison cost works out to 362,500 $ at these inputs.
  • Fixed contract manufacturing comparison adder works out to 45,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where share of volume actually moved to cm sits at 80% and the headline result is 545,000 $, this scenario comes in 25.23% below the baseline at 407,500 $.
  • It computes total annual contract-manufacturing spend (units x piece price x outsourced share, plus the transfer fee) and the effective cost per unit across the annual volume. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total contract manufacturing comparison cost: 407,500 $ (headline result)
  • Contract manufacturing comparison cost per unit: 8.15 $ / piece
  • Variable contract manufacturing comparison cost: 362,500 $
  • Fixed contract manufacturing comparison adder: 45,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Contract Manufacturing Comparison calculator, set share of volume actually moved to cm to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.