Amortized tooling

In practice

A $40,000 mold amortized over 100,000 parts adds $0.40 per part before financing cost. Agree on the amortization quantity, the buyout if the program ends early, and when title transfers.

Where it comes up

• Plastic injection moldingMolten thermoplastic injected into a steel or aluminum mold. Lowest piece price for plastic parts at 5,000+ a year.
• Zinc and aluminum die castingMolten zinc or aluminum injected into steel dies at high pressure. Thin walls and net shape at 2,500+ parts a year.
• Metal stampingShort- to medium-run stampings: brackets, clips, shields, and plates cut and formed from sheet or coil in a press.

Related terms

Tooling ownership

Tooling ownership is the legal title to molds, dies, and fixtures, and the right to control them. Customer-owned tooling is paid for by the buyer and can be moved to another supplier; supplier-owned tooling stays put. Ownership, maintenance, and transfer terms belong in writing before the tool is built.

Bridge tooling

Bridge tooling is lower-cost, faster tooling, often aluminum or unhardened P20 steel molds and soft dies, used to make production-intent parts while hardened production tooling is built. It covers pilot builds, launches, and early sales at volumes from hundreds to tens of thousands of parts.

Should-cost

Should-cost is an estimate of what a part should cost to make, built bottom-up from material, machine time, labor, overhead, tooling, and margin. Buyers use should-cost models to judge quotes and find cost-down targets, and suppliers use them to explain where a price comes from.

EAU

EAU is estimated annual usage, the number of parts a buyer expects to order in a year. Suppliers use EAU to choose the process, tooling, cavity count, and material buys, so it moves the quote more than almost any other RFQ field. Overstated EAUs lead to overbuilt tooling and disputes.