Supply Chain & Procurement worked example

Dual Source Savings with landed cost buying from the incumbent supplier of 310 units: a worked example

What does the result look like when landed cost buying from the incumbent supplier reaches 310 units? The full calculation is worked below with real intermediate numbers. Use it when dual source savings in supply chain and procurement needs a clean margin number for a supply chain and procurement go / no-go review.

The inputs for this scenario

  • Landed cost buying from the incumbent supplier: 310 units (raised for this scenario; the documented default is 125)
  • Landed cost buying from the alternate source: 100 units (unchanged)
  • Baseline spend on this part: 100 units (unchanged)

Working through the calculation

  • Applying the documented formula (Margin = gain or available amount - cost or required amount) to the inputs above produces each figure below.
  • At this operating point the engine returns 210 % for dual source savings margin, the number this scenario is built around.
  • At this operating point the engine returns 210 value for dual source savings amount gap.
  • At this operating point the engine returns 310 value for available dual source savings amount.
  • At this operating point the engine returns 100 value for required dual source savings amount.

How this compares with the baseline

  • Against the tool's baseline example, where landed cost buying from the incumbent supplier sits at 125 units and the headline result is 25 %, this scenario comes in 740% above the baseline at 210 %.
  • A figure at this level is achievable when landed cost buying from the incumbent supplier is genuinely sustained, not just peaked for a shift. It compares landed cost only; it does not price in qualification cost, minimum order penalties, or the quality risk of an unproven alternate, so treat the margin as gross, not net.

Results at a glance

  • Dual source savings margin: 210 % (headline result)
  • Dual source savings amount gap: 210 value
  • Available dual source savings amount: 310 value
  • Required dual source savings amount: 100 value

Run it with your numbers

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

Last reviewed 2026-05-12.