Job Shop Setup Cost and Minimum Lot Size Calculator
Setup is a fixed cost per lot, so a one-piece order and a 500-piece order do not cost the same per part. This calculator shows where an order stops losing money and where setup becomes a reasonable share of the price.
Your numbers
Your rule: setup per part should not exceed this share of the price.
Your results
Cost and profit per part vs lot size
Sweeps Lot size to test from 1 to 100, holding your other inputs fixed.
Review setup times in your ERP
Optional: compare routing setup hours against actual labor tickets.
Optional. The tool and every export work without this. No spam.
How to use it
Enter setup hours, shop rate, run time, material and the price you can get. The tool computes contribution per part, which is price minus material and run cost. Divide setup cost by that contribution and you get the break-even lot. The second result sets a policy: the smallest lot that keeps setup under your chosen share of price. Use it to set minimum order charges.
The math
Setup cost = setup hours x rate. Contribution = price - material - run cost. Break-even lot = setup cost / contribution, rounded up. Cost per part at lot Q = material + run cost + setup / Q. The curve falls steeply for small lots and flattens as setup is absorbed, which is why quoting only two or three quantity breaks misses most of the savings.
- Break-even lot = ceil(setup / contribution)
- Setup per part = setup / lot size
- Minimum lot for a cap = setup / (price x cap)
Using it in the shop
Set a minimum order charge equal to setup cost when the customer's quantity falls below your cap lot. Reduce setup hours with standard fixtures, offline tool presetting and saved programs, then re-run the numbers to see the effect. In an ERP, make sure setup hours on the routing come from actual labor tickets and not from a figure typed once during implementation.
Frequently Asked Questions
What if contribution is zero or negative?
Then no lot size recovers setup, because every part loses money before setup. The break-even shows 0. Raise the price or cut run time and material cost.
Should I include overhead in the shop rate?
Yes if you want fully loaded profit. If you use a direct cost rate, the break-even shows only the point where setup is covered, not overhead.
How is this different from EOQ?
EOQ balances setup against holding cost for inventory you make to stock. This tool is for customer orders where price is fixed and the question is whether the lot is worth running.
Why do small lots look so expensive?
Because the whole setup lands on a few parts. Spread setup across 10 parts and each carries a tenth of it; across 100 parts, a hundredth.
Netray can pull actual setup versus estimated setup hours from your ERP so these inputs reflect what really happens on the floor.
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