EOQ Calculator
This EOQ calculator finds the economic order quantity, the order size that keeps the total cost of ordering and holding stock as low as possible. Enter annual demand, cost per order, and holding cost per unit, and the EOQ calculator returns the EOQ, orders per year, and total annual cost. It is the fastest way to calculate economic order quantity.
Results
The EOQ Calculator is part of our Inventory collection. Browse more inventory to size, convert, and check your work alongside this tool.
What the EOQ calculator shows
Ordering often means many order costs; ordering rarely means carrying lots of stock. The EOQ calculator finds the balance point where the two costs are equal and the total is lowest. That order size is the economic order quantity, the core result of the classic EOQ model.
EOQ formula calculator
The EOQ formula calculator uses the Wilson formula:
D is annual demand, S the cost per order, H the holding cost per unit per year, and Q the order quantity. At the EOQ, annual ordering cost equals annual holding cost.
EOQ model calculator example
Demand of 10,000 units a year, $50 per order, and $2 to hold a unit for a year. The EOQ model calculator gives:
Average inventory is half the order, about 354 units.
How to calculate economic order quantity
To calculate economic order quantity, enter the annual demand in units, the fixed cost of placing one order, and the cost of holding one unit for a year. The EOQ calculator returns the EOQ, the number of orders per year, and the total annual ordering and holding cost. Holding cost often runs 20 to 30 percent of the unit price per year.
Reading the EOQ total cost calculator result
The EOQ tells you how much to order each time, not when. The total cost curve is flat near the EOQ, so rounding to a pallet or case size costs very little. Use the EOQ total cost calculator figure to compare suppliers or to see what a cheaper ordering process would save.
When to determine the economic order quantity
- Setting purchase quantities with the EOQ calculator
- Comparing order costs across suppliers
- Reducing holding cost in a warehouse
- Studying the EOQ model in operations courses
Common EOQ calculator mistakes
- Mixing time periods. Demand and holding cost must both be per year.
- Using unit price as holding cost. Holding cost is a yearly carrying charge, not the price.
- Ignoring safety stock. EOQ assumes steady demand.
Tips for accurate results
- Include all order costs: admin, freight, receiving.
- Round to case or pallet quantities.
- Recalculate when demand or costs change.
Average inventory EOQ calculator and holding cost
In the EOQ model stock falls from Q to zero and is then refilled, so average inventory is Q ÷ 2. An average inventory EOQ calculator multiplies that by the holding cost to get the annual carrying cost. Holding cost covers storage, insurance, capital, and the risk of stock becoming obsolete. Order quantities are often rounded to whole pallets, and the pallet calculator shows how many cartons fit on one.
EOQ calculator online vs real conditions
An EOQ calculator online assumes steady demand and fixed costs. When demand swings, use the EOQ for order size, add safety stock for the swings, and set a reorder point for timing. Together those three numbers form a complete reorder policy.
EOQ calculator reference (S = $50, H = $2)
| Annual demand | EOQ | Orders per year |
|---|---|---|
| 1,000 | 224 | 4.5 |
| 5,000 | 500 | 10 |
| 10,000 | 707 | 14.1 |
| 50,000 | 1,581 | 31.6 |
EOQ Calculator FAQ
What is the EOQ formula?
EOQ = √(2DS/H), where D is annual demand, S the cost per order, and H the holding cost per unit per year.
What does EOQ assume?
Steady demand, a fixed order cost, a fixed holding cost, and instant replenishment. Real demand varies, so add safety stock.
What is average inventory in the EOQ model?
Half the order quantity, Q ÷ 2, if stock falls steadily from Q to zero.
Does EOQ include quantity discounts?
No. With price breaks, compare the total cost at each break quantity as well as at the EOQ.