Reshoring & Tariff Strategy worked example

Dual Sourcing Cost Impact at 35% split allocation to backup: a worked example

This scenario runs the dual sourcing cost impact calculation on the strong side: 35% split allocation to backup, with every other input held at its documented default. A supply-risk manager prices the resilience of dual sourcing a critical part against the savings of single-source pricing.

The inputs for this scenario

  • Annual volume split to second source: 45,000 units/yr (unchanged)
  • Second-source unit premium: 2.1 $/unit (unchanged)
  • Split allocation to backup: 35 % (raised for this scenario; the documented default is 30)
  • Qualification and tooling cost: 60,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Annual dual-sourcing cost ($) = backup volume x second-source premium x split allocation% + qualification and tooling) to the inputs above produces each figure below.
  • At this operating point the engine returns 93,075 $ for total dual sourcing cost impact cost, the number this scenario is built around.
  • At this operating point the engine returns 2.07 $ / piece for dual sourcing cost impact cost per unit.
  • At this operating point the engine returns 33,075 $ for variable dual sourcing cost impact cost.
  • At this operating point the engine returns 60,000 $ for fixed dual sourcing cost impact adder.

How this compares with the baseline

  • Against the tool's baseline example, where split allocation to backup sits at 30% and the headline result is 88,350 $, this scenario comes in 5.35% above the baseline at 93,075 $.
  • Use it when building the business case for a second source, comparing backup-volume split scenarios, or budgeting qualification spend for a risk-mitigation program. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total dual sourcing cost impact cost: 93,075 $ (headline result)
  • Dual sourcing cost impact cost per unit: 2.07 $ / piece
  • Variable dual sourcing cost impact cost: 33,075 $
  • Fixed dual sourcing cost impact adder: 60,000 $

Run it with your numbers

  • Every input above is editable in the live Dual Sourcing Cost Impact calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.