Compare Supplier Offers by Unit Cost and Order Total
Compare supplier prices on the same basis. Include delivery, separate purchased from usable quantities, and check the full order total.
Decide what one unit means
One supplier quotes a box; another quotes individual items. Before comparing the prices, identify the quantity inside each offer. A box of 24 and a box of 30 are not equal purchases even if the item itself is comparable.
A unit price divides cost by quantity. OpenStax explains unit prices and rates. Use the same unit on both sides: per item, per pound or per square foot, whichever matches the actual comparison. Also check that the specifications and quality meet the same need. Arithmetic alone cannot establish that two products are interchangeable.
Add delivery before dividing
Consider two fictional offers for comparable items. Supplier A offers 24 items for $72, plus $12 delivery. Supplier B offers 30 items for $90 with delivery included. These prices are chosen examples, not current quotes. No tax or unlisted fee is added.
| Item | Supplier A | Supplier B |
|---|---|---|
| Purchased quantity | 24 | 30 |
| Item price | $72 | $90 |
| Delivery | $12 | Included |
| Order total | $84 | $90 |
| Cost per purchased item | $84 ÷ 24 = $3.50 | $90 ÷ 30 = $3.00 |
Leaving out A’s delivery would show $72 ÷ 24 = $3.00 per item. That would miss a cost included in the order. Apply the same treatment to every offer rather than removing a fee from only one side.
Lowest unit cost and smallest payment are different questions
Supplier B has the lower cost per purchased item, but its order total is $6 higher. If the task is simply to obtain 24 items, A requires the smaller payment. If all 30 items from B will be useful, the larger quantity may matter to your comparison. State which question you are answering.
For a project that requires whole packs, separate material and labor costs and calculate how many packs the stated requirement needs. Do not substitute the area you need for the quantity you actually have to buy.
Needed, purchased and usable are not the same
Suppose a different version of B’s offer contains only 24 usable items because six are unsuitable for the stated task and have no use elsewhere in this comparison. The cost per usable item is then $90 ÷ 24 = $3.75. The order still costs $90; you have changed the denominator to answer a different question.
That is not the same as having six spare items in useful inventory. If all 30 remain usable, calling six “waste” merely because you need 24 today would misdescribe them. Keep separate fields for required quantity, purchased quantity and genuinely unusable quantity.
Apply a discount to its stated base
For another illustrative scenario, B offers 10% off the $90 item price and delivery remains included. The discount is $9, the new total is $81, and the cost per purchased item is $81 ÷ 30 = $2.70.
OpenStax explains discounts applied to an original price. Check whether a real offer discounts the items, the delivery or another stated amount. To review changed percentage bases, check the base behind the percentage.
Keep the buying comparison separate from the selling price
If these items will be resold, cost per item is an input to a later calculation. It is not itself a margin. See why markup and margin differ before describing a percentage added to the purchase cost.
Keep the offer date, specification, quantities, delivery treatment and any excluded costs beside your totals. Calculator Duo is an iPhone and iPad app in development with labeled sheets and editable rows for calculations you supply. Use labels for the offer, quantity and delivery cost, then review the steps when a price changes. Explore Calculator Duo and join the waitlist for launch updates.
Frequently asked questions
Should delivery be included in a unit-cost comparison?
Include applicable delivery in the comparable order cost and treat it consistently across suppliers. In the example, A’s $12 delivery raises its order total from $72 to $84.
Does the lowest unit price give the lowest order total?
Not necessarily. In the example, B costs $3 per purchased item but $90 total; A costs $3.50 per item but $84 total.
How do I calculate cost per usable unit?
Divide the comparable total cost by the genuinely usable quantity and state why that quantity differs from the purchased amount. At $90 for 24 usable items, the result is $3.75 each.
Are extra items automatically waste?
No. Extra items may be usable inventory. Required, purchased and unusable quantities should not be treated as the same number.
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