Reshoring & Tariff Strategy worked example

Supplier Distance Cost at 92% distance-driven cost share: a worked example

This scenario runs the supplier distance cost calculation on the strong side: 92% distance-driven cost share, with every other input held at its documented default. A planner compares a distant low-price supplier against a closer one by pricing the freight and safety-stock penalty of the longer haul.

The inputs for this scenario

  • Annual shipments: 260 shipments/yr (unchanged)
  • Freight cost per mile-load: 420 $/shipment (unchanged)
  • Distance-driven cost share: 92 % (raised for this scenario; the documented default is 80)
  • Buffer inventory carrying cost: 18,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Annual distance cost ($) = shipments x freight per load x distance-driven share% + buffer inventory carrying cost) to the inputs above produces each figure below.
  • At this operating point the engine returns 118,464 $ for total supplier distance cost, the number this scenario is built around.
  • At this operating point the engine returns 456 $ / piece for supplier distance cost per unit.
  • At this operating point the engine returns 100,464 $ for variable supplier distance cost.
  • At this operating point the engine returns 18,000 $ for fixed supplier distance cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where distance-driven cost share sits at 80% and the headline result is 105,360 $, this scenario comes in 12.44% above the baseline at 118,464 $.
  • Use it when comparing suppliers at different distances and you need the full annual cost of distance, not just the freight line on an invoice. 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 supplier distance cost: 118,464 $ (headline result)
  • Supplier distance cost per unit: 456 $ / piece
  • Variable supplier distance cost: 100,464 $
  • Fixed supplier distance cost adder: 18,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.