Two objectives underlie this study: The first is a discussion of the subcontracting function of purchasing and the computation of the cost par unit per order on existing “closed out” orders. The second objective is a statistical analysis of the values computed from the cost/unit/order. The results of this study will provide management with the following tools for a plan of action: 1. A combined percentage rate of cost reduction for all of the subcontractors. 2. A percentage rate of cost reduction of each subcontractor. 3. A control on the purchasing department. 4. A control on subcontractors. 5. A method of analysis of other costs.