Finance Tools
Supplier Price Increase Cost Calculator
Estimate how a supplier price increase changes your unit cost and annual purchasing spend based on usage per unit, production volume, and supplier share.
Estimate the impact of a supplier price increase on your unit cost and annual purchasing spend.
Current price per input unit.
Use negative values for price decreases.
How many supplier input units are used per finished unit.
Units produced/sold per year.
If this supplier only covers part of your input (split sourcing), set the share here.
Supplier price
New supplier unit price: $4.36
Unit cost impact
Cost per finished unit: $6.16 → $6.71
Change: +$0.55
Annual spend impact
Supplier-covered input units: 92,400
Annual spend: $369,600 → $402,864
Spend change: +$33,264
Annual input units are approximated as (input units per product) × (annual volume).
Tip: If you split suppliers, use supplier share to isolate the impact from one vendor.
How it works
- New supplier price = current price × (1 + increase%).
- Annual input units = usage per unit × annual production volume.
- Supplier-covered units = annual input units × supplier share.
- Unit cost impact isolates only the supplier-covered portion.
FAQ
Why include supplier share?
Many businesses split sourcing across vendors. Share isolates the impact from one supplier.
Does this include freight or tariffs?
Not directly. Add them into the supplier unit price (effective landed cost) if you want that included.
How to use this supplier price increase cost calculator
- Enter current supplier unit price and expected price increase percentage.
- Enter how many supplier units you use per product unit and annual production volume.
- Optionally set supplier share (if this supplier covers only part of your input).
- Review unit cost impact and annual spend increase.
Example
A supplier charges $4.00 per input unit. You use 2.2 input units per product unit and make 60,000 units/year. Supplier price rises 9%. Supplier covers 70% of this input.
- Baseline annual input units = 2.2 × 60,000 = 132,000
- Supplier-covered units = 132,000 × 0.70 = 92,400
- Annual spend increase = (4.00 × 1.09 − 4.00) × 92,400
- Calculator also shows unit cost change per finished unit
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