Free sourcing decision tool
Make vs. Buy Calculator
Compare the full cost of internal production with supplier purchasing, then see which option wins at your volume and where the break-even point sits.
Simple calculator
Updates liveEnter the make and buy costs
Demand & time horizon
Buy from supplier
Make internally
Cost comparisonBuy cost includes supplier unit cost, freight/receiving and annual purchasing costs. Make cost includes materials, labor, variable overhead, avoidable fixed manufacturing costs and one-time setup. Common costs that do not change between the two options should be excluded.
Advanced calculator
Capacity + inflation + NPVBuild the multi-year sourcing model
Demand & finance
Buy strategy
Make strategy
Capacity & capital
Advanced methodThe make strategy produces internally up to capacity after adjusting for scrap. Any demand above internal good-unit capacity is automatically purchased as overflow. Buy defects increase the gross quantity that must be purchased. Capex is paid upfront, residual value is credited at the end, and discounted cost compares the timing of cash costs.
Annual cost forecast
Make includes overflow buys when capacity is exceededMake strategy vs. buy strategy by year
| Year | Good-unit demand | Good units made | Overflow good units bought | Make-strategy cost | Buy-strategy cost | Annual advantage | Discounted advantage |
|---|
Volume sensitivity
Growth, capacity and cost assumptions preservedDecision at different starting demand levels
| Starting demand | Make NPV cost | Buy NPV cost | Cost advantage | Internal share | Lower-cost strategy |
|---|
Supplier-price sensitivity
Other assumptions held constantDecision as supplier pricing changes
| Supplier price / unit | Make NPV cost | Buy NPV cost | Cost advantage | Lower-cost strategy |
|---|
Capacity sensitivity
Gross production capacityValue of additional internal production capacity
| Gross capacity / year | Internal share | Overflow units bought | Make NPV cost | NPV advantage vs buy | Lower-cost strategy |
|---|
Scope
Make vs. buy decisions include more than accounting cost
This calculator focuses on quantifiable sourcing costs. It does not automatically assign a dollar value to quality control, supplier concentration, intellectual-property exposure, lead-time risk, geopolitical risk, labor availability, production flexibility, minimum order quantities, strategic capacity, warranty exposure or the option value of preserving internal know-how. Include only costs that genuinely differ between the alternatives, and review major sourcing decisions with operations, finance and procurement stakeholders.