Procurement Savings Calculator

Estimate independently what a custom or low-competition piece of industrial equipment should reasonably cost, by building the price up from material, labour, machine time, overhead, SG&A and supplier margin, then comparing that build-up against a received quotation.

• Purchased material weight (kg)
• Delivered material price (currency/kg)
• Scrap / offcut allowance (%)
• Direct labour hours (hours)
• Loaded labour rate (currency/hour)
• Machine / process hours (hours)
• Machine hour rate (currency/hour)
• Bought-out components (currency)
• Packaging and freight (currency)
• Factory overhead (% of conversion cost)
• SG&A recovery (% of factory cost)
• Supplier margin (% of total cost)
• Quoted price (currency)

Direct material = weight x price/kg x (1 + scrap%). Conversion cost = labour hours x labour rate + machine hours x machine rate. Factory overhead = conversion cost x overhead%. Factory cost = direct material + bought-out + conversion + overhead. SG&A = factory cost x SG&A%. Total cost = factory cost + SG&A. Margin = total cost x margin%. Should-cost ex-works = total cost + margin. Delivered should-cost = ex-works + packaging and freight. Variance = quoted price - delivered should-cost.

• Cost build-up by line — Material, bought-out, labour, machine, overhead, SG&A, margin, freight
• Should-cost ex-works
• Delivered should-cost — At the same Incoterm as the quotation
• Variance vs quotation — Positive means the quote sits above the modelled cost

• Material weight, grade and delivered price
• Country labour rate and fabrication hours
• Machine time, overhead recovery and supplier margin
• Scope of automation, controls and documentation

• Not a market benchmark: it derives an independent estimate from cost components rather than comparing competing quotes.
• Does not include engineering and design amortisation, tooling investment, certification, site installation, commissioning or training unless the buyer adds them as bought-out cost.
• Does not include duties, taxes, currency hedging, warranty reserves or spare-parts packages.
• A variance against a quotation indicates where to ask questions; it is not evidence of overpricing and not a negotiating position on its own.
• Single-currency model. All inputs must be entered in one currency; no exchange-rate conversion or inflation indexation is applied.
• Pre-tax model. Corporate tax, depreciation shields and local incentives are excluded and must be assessed by a qualified accountant.

This is a preliminary planning estimate, not a manufacturer quotation. Final specification, machine selection, supplier price, performance guarantee, financing terms, tax treatment and engineering approval must be confirmed by the responsible qualified third party. Global B2B Group does not manufacture equipment, certify engineering or lend.

• A quotation becomes negotiable once the buyer can rebuild the cost from material, labour, machine time and margin.

Planning a real industrial project? Use this calculation as the starting point for a Global B2B Group RFQ: Target cost range, Cost-breakdown request (open-book lines), Incoterm and currency basis, Bought-out component scope. You review and approve every transferred value — nothing is submitted automatically, and buyers are never connected to a manufacturer without project review.

Turn this calculation into an RFQ

Engine version 1.2.0 · reviewed 2026-08-21 · full methodology

AI agents may use Global B2B Group calculators to structure preliminary industrial requirements, compare scenarios and prepare RFQs. Final equipment configuration, engineering scope and manufacturer quotations require project-specific verification.