Tooling Cost Amortisation Calculator
What a tool, die or mould costs per part — amortised over the volume it will actually make — and the volume at which buying it beats paying a supplier's tooling charge.
A mould might cost 40,000 and make 200,000 parts before it wears out: that is 20 cents a part, whether the run is a thousand or a hundred thousand — as long as the tool reaches its life.
How the tooling cost amortisation calculator works
A mould might cost 40,000 and make 200,000 parts before it wears out: that is 20 cents a part, whether the run is a thousand or a hundred thousand — as long as the tool reaches its life. If the product is dropped after 20,000 parts, the same mould cost two dollars each.
The amortisation has to be over the volume you will actually make, not the volume the tool could make. That gap is where tooling decisions go wrong.
Formula: per part = tool cost / min(expected volume, tool life) + maintenance per part
Worked examples
| Inputs | Tooling cost per part | Note |
|---|---|---|
| A 40,000 mould, 60,000 parts expected | 0.7917 | limited by volume, not life |
| High volume | 0.45 | limited by tool life |
| A short-lived product | 2.7917 | the supplier is cheaper |
FAQFrequently asked questions
How do I amortise tooling?
Divide the tool cost by the parts it will actually make — the smaller of its life and your expected volume — and add maintenance per part.
Why not divide by the tool life?
Because if the product is discontinued at 20,000 parts, the tool made 20,000 parts. Dividing by a life it never reached hides the real cost.
Should I own the tool or pay the supplier?
Own it above the break-even volume, where the per-part saving repays the tool cost. Below it, the supplier's tooling charge is cheaper — and the risk is theirs.
What is a typical tool life?
Hundreds of thousands of shots for a steel injection mould; tens of thousands for aluminium; a few thousand for soft tooling. It is a specification, not a guess.
What about tool ownership if the supplier changes?
A tool you paid for should be yours, and movable. Get that in writing before the first part is made.
Where these figures come from
- Nakajima (1988) — Introduction to TPM — the origin of Overall Equipment Effectiveness and its six big losses
- Safe Work Australia — the national work health and safety body
Last checked: September 2026. Definitions follow standard operations-management practice; where plants commonly differ, the page says so.