ECO.2:5.1 - A substitute becomes worthwhile

A constructed packaging case has two qualified alternatives. The present insert uses two units of material at €3 each. Another uses 1.5 units of a different material at €4 each and adds €0.50 of handling per package. All other relevant costs and performance are supplied as equal. The present choice costs €6; the alternative costs €6.50.

A current matching offer raises the first material to €4 per unit. Its cost becomes €8, so the alternative saves €1.50 per package before a €150 changeover. For a confirmed order of 200 packages the expected saving is €300, or €150 after changeover. The practitioner can select the substitute without first explaining the whole price movement.

If only 50 packages remain before an already contracted cheaper delivery, the saving is €75 before changeover, so the same observation supports keeping the present setup. With these unchanged conditions, 100 packages is the monetary break-even point: €150 / €1.50. At that quantity, other consequences can determine the choice. If the substitute is not qualified for the product, its required qualification is part of the comparison.