Current scenario
- Factory Worker skill
- 60
- Planned production
- 1,000 units per day
- MAKE
- $0.50
- BUY
- $1.10
- Difference
- $0.60
Factory decision tool
Should You Manufacture It or Import It?
Compare factory material cost against buying the finished product, then add labor, factory and logistics allocations to see where the decision changes.
This compares cost under your current scenario, not a universally better supply strategy.
Procurement decision console
Compare Manufacturing With Buying the Finished Product
Reference example — product, skill, volume, and costs are editable planning values.
Compare this product
- recipe
- Frozen Food
- Base recipe output
- 200
- Effective output
- 160
Factory Worker satisfaction does not multiply recipe output; this calculation uses raw skill.
Manufacture
| Ingredient | Qty | Price per unit | Total | Share of material cost |
|---|---|---|---|---|
| Chicken Breast | 200 | $0.35 | $70.00 | 87.5% |
| Vinaigrette | 100 | $0.10 | $10.00 | 12.5% |
| Total ingredient value | $80.00 | 100% | ||
Main material cost driver: Chicken Breast
Import finished product
- Finished-product purchase price
- $1.10
This comparison uses the selected buy price exactly as entered. Purchasing Agent effects are not added unless supplied by your scenario.
Preliminary material result
MAKE
$0.50
per unit
versus
BUY
$1.10
per unit
MAKE has a preliminary material-cost advantage of $0.60 per unit.
This preliminary result excludes factory labor, overhead, warehouse, and distribution allocations.
- Difference
- $0.60 per unit
- Available operational-cost headroom
- $0.60 per unit
Cost headroom before BUY becomes cheaper
$600.00 per day
You can add up to $600.00 per day of factory, labor, warehouse and logistics costs before the current 1,000-unit plan loses its material-cost advantage.
How is this material cost calculated?
Chicken Breast200 × $0.35 = $70.00
Vinaigrette100 × $0.10 = $10.00
- Batch materials
- $80.00
- Effective output
- 160
- Material cost per effective unit
- $80.00 ÷ 160 = $0.50 per unit
Current comparison includes
- ✓ Ingredient
- ✓ Effective output
- ✓ Finished-product purchase price
Not included yet
- • Factory payroll
- • Factory overhead
- • Warehouse and storage
- • Distribution
Material comparison only
What Would Make the Decision Flip?
These are decision boundaries for the current inputs, not official optimal values.
Material-only thresholds
Worker-skill material crossoverNo crossover
No crossover · MAKE remains cheaper on materials from Skill 0 to 100.
Material-only buy-price crossover$0.50
Below this landed purchase price, buying becomes cheaper.
Ingredient price headroom+120%
Materials only · Recipe and worker output vs selected finished-product price.
Full-cost thresholds
Full-cost break-even volume2,500 units per day
Assumes fixed costs and unit prices remain unchanged. Factory overhead: $2,000.00 per day; Material cost per effective unit: $0.50; BUY: $1.30. < 2,500: BUY; ≥ 2,500: MAKE.
Maximum factory/logistics overhead$800.00
Maximum daily allocation before make matches landed buy cost.
Current overhead gapCurrent allocations exceed the cost headroom by $1,200.00 per day.
Current allocations exceed the cost headroom by $1,200.00 per day.
Full-cost buy-price crossover$2.30
Below this landed purchase price, buying becomes cheaper.
Ingredient price headroomNone · Even zero ingredient cost would not offset the entered fixed costs.
None · Even zero ingredient cost would not offset the entered fixed costs.
Test one variable
Test scenario
- Factory Worker skill
- 80
- Planned production
- 1,000 units per day
- MAKE
- $0.44
- BUY
- $1.10
- Difference
- $0.66
Factory Worker satisfaction does not multiply recipe output; this calculation uses raw skill.
Why Manufacturing Cost Changes
All paths end at cost per finished unit.
MAKE cost path · BUY cost path
MAKE cost path
- 1
Ingredient prices
- 2
Recipe material value
- 3
Factory Worker skill
- 4
Effective output
- 5
Allocated factory costs
- 6
Full make cost
BUY cost path
- 1
Purchase price
- 2
Importer price
- 3
Inbound and distribution
- 4
Other purchasing cost
- 5
Full buy cost
Common Make-or-Buy Questions
Why can factory production cost more than importing?
Check worker skill, ingredient prices, production volume, and allocated overhead.
Does Factory Worker skill change production cost?
It changes effective output and therefore material cost per finished unit.
Why did the answer change when production increased?
Entered fixed costs are spread across more units.
How Make vs Buy Decisions Work in Big Ambitions
Material cost is only the first layer. The calculator divides ingredient value by effective recipe output.
The answer depends on this scenario. Import prices, worker skill, volume, and allocated costs can all move the crossover.
Continue This Decision
Factory Worker training
Compare output improvement with training and wage cost.
Factory recipes
Inspect the selected recipe and workstation requirements.
Warehouse and logistics
Check storage and delivery constraints for the finished product.
Profit Calculator
Carry the landed cost into the wider business model.