Building a should-cost model
Break a part down into materials, labour, overhead, and margin — so you negotiate from evidence, not a gut feeling.
A should-cost model breaks a part down into what it actually costs to make — so you negotiate from evidence instead of reacting to a number.
1
Start with materials
Raw inputs by mass, grade, and current market price. This is the floor no supplier can honestly beat.
2
Add process & labour
Machine time, cycle time, and labour rate for each operation — costed per step, not assumed as a lump.
3
Overhead & fair margin
A reasonable overhead recovery and the supplier's fair margin — visible line items, not an invisible mark-up.
4
Line it up against the quote
Put the model next to the quote. Now every euro of the gap is a specific, answerable question.
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