Last Time Buy: How to Calculate the Right Stocking Quantity

When a manufacturer announces the discontinuation of a component, a narrow time window usually follows for the Last Time Buy (LTB) – the final opportunity to order the part directly from the original manufacturer. Misjudging your quantity requirement risks either costly excess inventory or production stoppages in the years ahead.

What Is a Last Time Buy?

A Last Time Buy is the final regular ordering opportunity for a discontinued component, after the manufacturer has communicated the End-of-Life date via a PCN/EOL notice. The order window is typically 6 to 18 months after the announcement; after that, the component is no longer available from the original manufacturer. For more background, see the article What Does End-of-Life Mean for Electronic Components?

Calculating the Stocking Quantity

A reliable LTB quantity is derived from several factors that you should determine as precisely as possible:

1. Annual demand (units/year) – Average over the past two to three years, adjusted for known product ramp-ups or phase-outs.
2. Planned remaining production lifetime (years) – How long will the end product in question still be manufactured or serviced?
3. Safety buffer – Allowance for demand fluctuations and delays in the successor product, typically 10–20 % of base demand.
4. Scrap and repair requirement – Manufacturing scrap, warranty cases, spare-part supply for units already shipped.
5. Existing stock on hand – Deduct your own inventory and confirmed delivery quantities from current blanket orders.

The basic formula is:

Worked Example (Illustrative)

A machinery manufacturer uses a microcontroller IC in a control module. Example figures: annual demand 2,000 units, planned continued production 4 years, safety buffer 15 %, total repair requirement 200 units over the full period, stock on hand 500 units.

Calculation: (2,000 × 4) + 15 % × 8,000 + 200 − 500 = 8,000 + 1,200 + 200 − 500 = 8,900 units. This example is for illustration only; your actual figures may differ significantly.

Risks on Both Sides

Two opposing mistakes are particularly common in practice:

• Over-stocking: Capital is tied up, warehouse space is consumed, and if the product is discontinued early, you face write-downs on unsellable inventory.
• Under-supply: Missing components halt production or force costly emergency purchases on the spot market – often at multiples of the original price.

Storage: What You Need to Watch Out For

An incorrectly stored LTB batch can become worthless before it is ever used:

• ESD protection for sensitive ICs and discrete semiconductors – ESD bags, conductive containers, grounded shelving systems.
• MSL requirements (Moisture Sensitivity Level) – moisture-sensitive packages must be stored dry, in dry cabinets if necessary.
• Observe manufacturer shelf-life specifications; many semiconductors have a shelf life of 2–5 years under standard conditions, capacitors and batteries often less.
• FIFO principle must be maintained during consumption, and storage batches should be regularly checked for solderability (wettability).

Alternatives When the LTB Deadline Has Been Missed

A PCN notice does not always reach all stakeholders in time. If the LTB window has been missed, the following options are available:

• Sourcing through certified brokers and excess-inventory pools (verified surplus stock from overproduction).
• Component matching – identifying a compatible replacement that can be used with no redesign or minimal redesign.
• Demand-driven pooling with other buyers to reach minimum order quantities.