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FINANCIAL

Economic Order Quantity Calculator

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Balance replenishment order costs against inventory holding costs in the classical EOQ model.

Your inputs

units/year
USD/order
USD/unit/year

Example values are shown. Edit them for your calculation.

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Your result

FINANCIAL

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On this page How it works & practical examples

How to use the Economic Order Quantity Calculator

Enter a currency amount for annual holding cost per unit, not a percentage. Ordering cost applies to each replenishment event. The modeled balance occurs where annual ordering and holding costs are equal.

The calculation

EOQ = √(2 × annual demand × order cost / annual unit holding cost)

Worked example

10,000 units/year, $50 per order and $2 annual holding cost per unit give a continuous EOQ of about 707.1068 units.

Assumptions and limits

Assumes steady demand, immediate replenishment, no shortages and no quantity discounts. Whole-unit ordering is an approximation; supplier minimums, storage capacity and lead-time uncertainty require additional constraints.

Common questions

Is EOQ the reorder point?

No. EOQ addresses order size; reorder point addresses the stock level at which to order.

Where is purchase price included?

A constant unit purchase cost does not change the classical EOQ optimum. Quantity discounts would change the model.

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