Economic Order Quantity Calculator

Method and assumptions

The classic EOQ estimate is √(2 × annual demand × cost per order ÷ annual holding cost per unit). The recommendation rounds up to a whole unit; order count is annual demand ÷ that quantity. Annual ordering and average-cycle-stock holding costs are then calculated at the rounded recommendation.

Worked example

For 2,400 units/year, $30 per order, and $4 holding cost per unit-year, raw EOQ is √36,000 ≈ 189.74, so the recommended lot is 190 units. That is about 12.63 orders/year; ordering plus holding cost is about $758.95/year.

How to use the result

Use this as a comparison point for lot-size discussions. The model assumes stable demand, a fixed cost per order, and linear holding cost; it excludes quantity discounts, stockouts, capacity limits, lead time, and safety stock.

Input meanings and limits

• Annual demand (units): Assume the same annual volume for the modeled year.
• Cost to place one order: Enter your own administrative or delivery cost per order.
• Annual holding cost per unit: Annual cost of carrying one unit of average stock.

Inputs accept finite, nonnegative values in the displayed ranges; percentages are bounded to 0–100% (with 99.99% maximum where division by the remaining share is used), and whole-unit or month fields require integers. Currency figures are shown in USD for convenience; enter values in one consistent currency. This is a planning worksheet, not financial, legal, tax, or accounting advice.

Related calculators

Inventory reorder point calculator and Purchase order landed cost calculator.