Should Cost Estimating Software

Should costing is an analysis (typically performed by OEM's or engineering firms on behalf of their OEM customers) of a supplier's expenses involved in manufacturing a part or assembly. The purpose of should costing is to arrive at a cost estimate, which can guide negotiations and compare to quotes provided by suppliers. Should costing is often used by procurement in an attempt to lower product costs.

The traditional processes in arriving at a should cost was very manual, timely, labor-intensive. In a large organization, the engineering department typically arrives at a "should" cost for a product. Often this estimate is achieved by either looking at the costs paid in the past for similar products or based on the experience of the person coming up with the estimate.

Should costing can complement strategic sourcing or be used as an alternative method. In strategic sourcing an organization simply compares the quotes of at least three suppliers for a product and makes sourcing selections based on that data alone.

Be sure to evaluate MTI Systems' Should Cost Estimating Software for a free demonstration.