# Lifetime Buy vs Redesign Break-Even Calculator

> Source: https://netray.co/tools/lifetime-buy-vs-redesign-breakeven-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

When a component goes end of life, find the volume where redesigning beats buying a lifetime stock.

## Category

electronics

## Industry

Electronics Manufacturing

## Audience

- Component engineer
- Electronics buyer
- Product manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Units of the part needed through product life

**Key:** units

**Type:** number

**Default:** 40000

**Min:** 0

**Step:** 1000

**Unit:** pcs

#### End of life part unit price

**Key:** old_price

**Type:** number

**Default:** 3.2

**Min:** 0

**Step:** 0.05

**Unit:** $/pc

#### Years the stock must last

**Key:** years

**Type:** number

**Default:** 6

**Min:** 0.5

**Step:** 0.5

**Unit:** years

#### Annual carrying cost

**Key:** carry

**Type:** slider

**Default:** 15

**Min:** 0

**Max:** 40

**Step:** 1

**Unit:** %

#### Write-off allowance for unused stock

**Key:** writeoff

**Type:** slider

**Default:** 10

**Min:** 0

**Max:** 50

**Step:** 1

**Unit:** %

#### Redesign engineering cost

**Key:** nre

**Type:** number

**Default:** 48000

**Min:** 0

**Step:** 1000

**Unit:** $

#### Requalification and certification cost

**Key:** requal

**Type:** number

**Default:** 22000

**Min:** 0

**Step:** 1000

**Unit:** $

#### Replacement part unit price

**Key:** new_price

**Type:** number

**Default:** 2.4

**Min:** 0

**Step:** 0.05

**Unit:** $/pc

**Outputs:**

#### Lifetime buy cost per piece used

**Key:** ltb_unit

**Expr:** old_price * (1 + carry / 100 * years / 2) * (1 + writeoff / 100)

**Format:** decimal

#### Lifetime buy total cost

**Key:** ltb_total

**Expr:** units * ltb_unit

**Format:** currency

**Primary:** true

#### Redesign total cost

**Key:** redesign_total

**Expr:** nre + requal + units * new_price

**Format:** currency

**Primary:** true

#### Redesign saving (positive) or extra cost

**Key:** difference

**Expr:** ltb_total - redesign_total

**Format:** currency

#### Break-even volume

**Key:** breakeven_units

**Expr:** if(gt(ltb_unit - new_price, 0), (nre + requal) / (ltb_unit - new_price), 0)

**Format:** integer

**Description:** Above this volume, redesign is cheaper. Zero means redesign never pays back.

**Chart:**

#### Lifetime buy vs redesign total cost by volume

**Type:** line

**X:** units

**From:** 1000

**To:** 100000

**Steps:** 30

**Series:**

- ltb_total
- redesign_total

**Disclaimer:** Excludes the engineering risk of a redesign, schedule impact and customer requalification delays unless you add them to the cost inputs.

## Content

**Intro:** When a manufacturer issues an end-of-life notice, you can buy a lifetime stock or redesign around the part. The right choice depends on volume, remaining product life and what a redesign really costs. This calculator finds the break-even point so the decision is not made on instinct.

**Sections:**

#### How to use it

**Body:** Enter the total pieces you expect to need and the end-of-life part price. Add the years the stock must last, your carrying cost rate and a write-off allowance for stock you never use because forecasts are wrong. Then enter the redesign engineering cost, requalification and certification cost, and the replacement part price. The result shows both total costs and the volume at which they cross.

#### The formula

**Body:** The lifetime buy cost per piece is the purchase price, increased by half the carrying cost over the years the stock is held, because average inventory is about half the opening stock, and increased again by the write-off allowance. Redesign total is the fixed engineering and requalification cost plus the volume times the new part price. Break-even volume is the fixed redesign cost divided by the per-piece difference.

#### Reading the result

**Body:** Below the break-even volume, a lifetime buy wins because the redesign cost cannot be spread across enough units. Above it, redesign wins. If the break-even volume is zero, the replacement is no cheaper than the lifetime buy per piece and redesign never pays back on cost alone. Consider non-cost factors too: regulated products may need lengthy recertification, and a redesign can also remove other obsolescence risk from the same board.

#### Common mistakes

**Body:** Teams often understate requalification, especially for aerospace, medical and automotive products where testing and documentation can cost more than the engineering. Another mistake is sizing the lifetime buy to the optimistic forecast, which inflates write-off. Last, check for pin-compatible alternates or authorized aftermarket sources before choosing either path, since they may beat both options.

**Cta:** Netray can help your team pull usage history, open demand and lifecycle flags from the ERP so the forecast behind this decision is based on actual consumption.

**Faq:**

#### How do I choose the years the stock must last?

**Answer:** Use the remaining planned production plus the service and spares period you have committed to customers. Contracts and warranty obligations usually set the longer end.

#### What write-off allowance is sensible?

**Answer:** It depends on forecast reliability. A stable, contracted program may need a small allowance, while a speculative forecast could justify a much larger one.

#### Is there a third option?

**Answer:** Often yes: a drop-in alternate, an authorized aftermarket manufacturer or a partial lifetime buy covering the period until a planned redesign. Model each as a variant by changing the inputs.

#### Does this include storage conditions?

**Answer:** Not directly. Long-term storage of moisture sensitive or solderability-limited parts needs controlled conditions and sometimes re-testing, which you can add to the carrying cost rate.

## Search terms

lifetime buy vs redesign, end of life component decision, last time buy or redesign break even, eol redesign cost calculator, obsolescence management cost model, component end of life buy calculator, redesign requalification cost

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