Price and manage delivery risks — Healthcare & medical supplies

By the end of this lesson, you will be able to calculate a price, test its return and address a delivery risk.

Common to all countries

Build the cost before choosing the price

Start with quantities, paid time, third-party costs and delivery assumptions. Include mobilisation, supervision, compliance, warranty or support, overhead and the end of the contract where relevant. Separate fixed costs from costs that vary with usage. Forecast volumes are not minimum orders unless the contract makes that commitment.

In this exercise, target margin means profit divided by selling price. A 20% margin therefore requires price = cost ÷ 0.80. Adding 20% to cost is a markup and produces a lower margin. Taxes, discounting and financing are excluded from these teaching sums; add the applicable items to a real bid. Test one credible adverse scenario and decide who controls its cause and how the contract allocates it.

Worked example — Equip two outpatient clinics

This is a fictional teaching case. Quantities, prices and contractual conditions below are assumptions for the exercise, not legal requirements or market benchmarks.

A replacement part has a six-week lead time. Holding a critical spare or arranging a compatible loan device changes cost and downtime exposure. Specify which solution is actually included and who approves substitution.

Item	Cost (currency units)
Ten devices	40,000
Installation and training	4,000
Two-year service provision	6,000
Total	50,000

Total cost is 50,000. To retain 20% of the selling price as profit, price is 50,000 ÷ 0.80 = 62,500. If “Critical spare stock” adds 2,500 to cost without a price increase, profit becomes 10,000, or 16% of price. Preserving 20% would require 65,625, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase.

Country specific — what to verify

Identify the destination’s medical-device regulator and the product category before checking registration, labelling and vigilance obligations. Medicines, devices and clinical services follow different rules. Separately verify local health-data, storage and transport requirements; an overseas approval is not automatic market access.

Product liability and regulated storage or transport. Use the destination-country module and the actual tender pack. The sources below are references with their own scope; they do not form a single worldwide regime. For the general method, revisit the foundations.

Put it into practice

Calculate the price for 20% of selling price as profit, then add 2,500 to cost. Calculate profit at the unchanged price and write one risk-control action.

Model answer

Total cost is 50,000. To retain 20% of the selling price as profit, price is 50,000 ÷ 0.80 = 62,500. If “Critical spare stock” adds 2,500 to cost without a price increase, profit becomes 10,000, or 16% of price. Preserving 20% would require 65,625, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase. A replacement part has a six-week lead time. Holding a critical spare or arranging a compatible loan device changes cost and downtime exposure. Specify which solution is actually included and who approves substitution.

Keep this worksheet in your working file. The quiz below checks the lesson’s decisions; passing it is neither a professional qualification nor a guarantee of an award.