WEEK 1 · LESSON 6 · TOPIC 18 OF 26 · The Cost Calculation Example

The Cost Calculation Example

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  1. Overview

Overview

A simplified calculation demonstrates the effect of tiered routing.

If 100 million tokens are processed at $5 per million tokens, the cost is $500.

A tiered allocation uses:

  • 10 million tokens at $5 per million.
  • 30 million tokens at $3 per million.
  • 60 million tokens at $1 per million.

The total is:

  • $50 for the high tier.
  • $90 for the middle tier.
  • $60 for the low tier.

The combined cost is $200.

Compared with $500, the tiered system uses 40 percent of the original cost and saves 60 percent.

The calculation is simplified, but it demonstrates why routing matters. The system avoids paying premium prices for work that does not need premium reasoning.