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Link to "1-16.2 Operating Considerations" Link to contents for "1 USPS Supplying Practices Process Step 1: Identify Needs"      Link to "1-16.4 Justify Postal Service Investment"

1-16.3 Cost Considerations

Cost is a crucial tactical consideration. An estimate of the cost for the requirement must be developed based on a detailed analysis of the costs expected to be generated by performing the work in-house or through a supplier. The following costs should be major elements in a make vs. buy cost estimate.

To make:

  • Delivered purchased material costs.
  • Direct labor costs.
  • Any follow-on costs stemming from quality and related problems.
  • Incremental inventory carrying costs.
  • Incremental factory overhead costs.
  • Incremental managerial costs.
  • Incremental purchasing costs.
  • Incremental costs of capital.
  • Environmental costs.
  • Disposal costs.

To buy:

  • Purchase price of the part.
  • Transportation costs.
  • Receiving and inspection costs.
  • Incremental purchasing costs.
  • Any follow-on costs related to quality or service.



Link to "1-16.2 Operating Considerations" Link to contents for "1 USPS Supplying Practices Process Step 1: Identify Needs"      Link to "1-16.4 Justify Postal Service Investment"
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