Lifetime Buy vs Redesign Break-Even Calculator
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.
Your numbers
Your results
Excludes the engineering risk of a redesign, schedule impact and customer requalification delays unless you add them to the cost inputs.
Lifetime buy vs redesign total cost by volume
Sweeps Units of the part needed through product life from 1000 to 100000, holding your other inputs fixed.
Consumption data for lifecycle decisions
Optional: a short review of how usage and demand history could be pulled from your ERP.
Optional. The tool and every export work without this. No spam.
How to use it
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
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
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
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.
Frequently Asked Questions
How do I choose the years the stock must last?
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?
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?
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?
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.
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.
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