Reshoring & Tariff Strategy worked example

Supplier Distance Cost at 58% distance-driven cost share: a worked example

Suppose distance-driven cost share 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 freight and inventory penalty driven by a supplier's geographic distance from the plant.

The inputs for this scenario

  • Annual shipments: 260 shipments/yr (held at the documented default)
  • Freight cost per mile-load: 420 $/shipment (held at the documented default)
  • Distance-driven cost share: 58 % (the input this scenario stresses; the baseline uses 80)
  • Buffer inventory carrying cost: 18,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Annual distance cost ($) = shipments x freight per load x distance-driven share% + buffer inventory carrying cost.
  • Total supplier distance cost works out to 81,336 $ at these inputs, and this is the headline figure for the scenario.
  • Supplier distance cost per unit works out to 313 $ / piece at these inputs.
  • Variable supplier distance cost works out to 63,336 $ at these inputs.
  • Fixed supplier distance cost adder works out to 18,000 $ at these inputs.

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 22.8% below the baseline at 81,336 $.
  • It sums the distance-driven share of annual freight with buffer inventory carrying cost to give total annual distance cost, then divides by shipments for a per-shipment figure. 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 supplier distance cost: 81,336 $ (headline result)
  • Supplier distance cost per unit: 313 $ / piece
  • Variable supplier distance cost: 63,336 $
  • Fixed supplier distance cost adder: 18,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Supplier Distance Cost calculator, set distance-driven cost share to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.