How One Buyer Used Should-Cost Modeling to Cut Costs 17 Percent

The Buyer's Side with Fexingo: Procurement, Sourcing, and B2B Purchasing Decisions · Jul 16, 2026 · 11m · transcript

Episode 116 of The Buyer's Side with Fexingo: Lucas and Luna dive into should-cost modeling, a cost-estimation method that pressures suppliers to justify prices. The hosts walk through a real-world case from a mid-size automotive parts manufacturer that used should-cost models to cut spending by 17 percent on a major powertrain component. They explain how the buyer built the model from raw materials, labor, and overhead data, and negotiated a price drop from $18.50 to $15.35 per unit. Lucas breaks down the difference between should-cost and cost breakdown analysis, and Luna shares a…