# Last Time Buy (LTB) Quantity and Cost Calculator

> Source: https://netray.co/tools/dmsms-last-time-buy-quantity-and-cost-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Calculate how many parts to buy when a component goes end-of-life, what it costs to hold them, and when a redesign becomes cheaper.

## Category

supply-chain

## Industry

Defense Electronics

## Audience

- Component engineer
- Program manager
- Buyer
- Obsolescence manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Annual demand for the part

**Key:** demand

**Type:** number

**Default:** 2400

**Min:** 0

**Step:** 50

**Unit:** units/year

**Help:** Production plus expected spares and repair demand.

#### Years of support required

**Key:** years

**Type:** number

**Default:** 10

**Min:** 1

**Max:** 40

**Step:** 1

**Unit:** years

**Help:** Remaining production plus sustainment period.

#### Yield loss, scrap and rework attrition

**Key:** attrition

**Type:** number

**Default:** 3

**Min:** 0

**Max:** 30

**Step:** 0.5

**Unit:** %

**Help:** Parts lost in handling, placement and test.

#### Forecast uncertainty buffer

**Key:** buffer

**Type:** number

**Default:** 10

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

**Help:** Extra quantity for demand growth and failure replacement.

#### Unit price at last time buy

**Key:** unit_cost

**Type:** number

**Default:** 4.8

**Min:** 0

**Step:** 0.05

**Unit:** $

#### Annual carrying cost

**Key:** carry

**Type:** number

**Default:** 12

**Min:** 0

**Max:** 50

**Step:** 0.5

**Unit:** % of value

**Help:** Storage, handling, insurance, testing and capital cost per year.

#### Redesign and requalification cost

**Key:** redesign

**Type:** number

**Default:** 185000

**Min:** 0

**Step:** 5000

**Unit:** $

**Help:** Engineering, test, qualification and documentation for a replacement.

**Outputs:**

#### Last time buy quantity

**Key:** qty

**Expr:** ceil(demand * years * (1 + attrition / 100) * (1 + buffer / 100))

**Format:** integer

**Primary:** true

**Description:** Total pieces to purchase.

#### Purchase cost

**Key:** buy_cost

**Expr:** qty * unit_cost

**Format:** currency

#### Carrying cost over the period

**Key:** carry_cost

**Expr:** (qty * unit_cost / 2) * (carry / 100) * years

**Format:** currency

**Description:** Approximates average inventory at half the buy as stock draws down linearly.

#### Total cost of last time buy

**Key:** total_ltb

**Expr:** buy_cost + carry_cost

**Format:** currency

**Primary:** true

#### Average cost per year of support

**Key:** per_year

**Expr:** total_ltb / years

**Format:** currency

#### Redesign cost minus LTB cost

**Key:** gap

**Expr:** redesign - total_ltb

**Format:** currency

**Description:** Positive means the last time buy is cheaper than redesign.

**Chart:**

#### Total LTB cost vs years of support

**Type:** line

**X:** years

**From:** 1

**To:** 30

**Steps:** 30

**Series:**

- total_ltb
- redesign

**Disclaimer:** Simplified model with linear drawdown and no discounting, shelf-life limits, storage degradation or price breaks. Include shelf life and solderability limits in the decision for date-coded parts.

## Content

**Intro:** When a manufacturer issues an end-of-life notice, defense and aerospace programs often face a last time buy decision: buy enough to cover the program life or fund a redesign. This calculator frames that decision with a quantity, a full cost and a break-even against redesign.

**Sections:**

#### How to use it

**Body:** Enter demand per year including spares, the years of support you need and the loss allowances for scrap and uncertainty. Add the price, an annual carrying cost rate and your estimate for redesign and requalification. The result is the buy quantity, the total commitment, the carrying cost and the gap versus redesign. Use the chart to see where the LTB line crosses the flat redesign cost as the support period grows.

#### The model

**Body:** Quantity equals annual demand times years, increased by attrition and a forecast buffer. Cost equals quantity times unit price plus carrying cost. Carrying cost uses average inventory, half of the initial buy value, times the carrying rate times years, which assumes consumption is steady. This is the same basic logic used in obsolescence management plans under DMSMS programs, where a last time buy is one resolution option beside substitutes, aftermarket sources, emulation and redesign.

**Bullets:**

- Buy cost scales with years, redesign cost does not.
- Long sustainment tails favor redesign or emulation.
- Short remaining production favors a last time buy.

#### Reading the result

**Body:** With 2,400 per year over 10 years at 3 percent attrition and 10 percent buffer, the buy is about 27,200 parts and the total commitment about 150,000 dollars with carrying cost. The redesign at 185,000 dollars is more expensive by about 35,000 dollars, so the buy wins on cost alone. Extend the program to 25 years and the answer flips. Also weigh non-cost factors: shelf life, counterfeit exposure on aftermarket stock, and the schedule risk of redesign.

#### Common mistakes

**Body:** Teams often forget repair and spares demand, which can exceed production demand late in life. Others buy the entire quantity from a broker, which creates counterfeit and traceability risk; buy from the manufacturer or authorized channel and have the notice dates documented. Do not ignore storage conditions and date code limits, and set the quantity in your ERP with a clear demand source so the plan can be revised yearly.

**Cta:** Netray can discuss how obsolescence notices, BOM where-used and demand forecasts in your ERP can be combined into a private obsolescence view.

**Faq:**

#### What is a last time buy?

**Answer:** A last time buy is a final purchase of an obsolete or discontinued part, made before the manufacturer stops shipping, to cover expected future demand for the life of a program or product.

#### How should I set the forecast buffer?

**Answer:** Base it on demand uncertainty, program growth risk and expected field failures. Ten to twenty percent is a common starting range, but the right figure depends on your program and your historical forecast error.

#### Is a last time buy always cheaper than redesign?

**Answer:** No. For short remaining life it often is. For long sustainment tails, storage and shelf life limits can make redesign, emulation or an approved substitute cheaper and lower risk.

#### Does the model discount future costs?

**Answer:** No. It is a simple undiscounted view. For large commitments add your cost of capital through the carrying rate or run a net present value comparison with finance.

## Search terms

last time buy calculator, ltb quantity, dmsms last time buy, obsolescence last time buy cost, end of life component buy quantity, ltb versus redesign, lifetime buy calculator, component obsolescence management

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