EOQ Calculator
Find the economic order quantity with EOQ = √(2DS ÷ H), plus orders per year, reorder point, order cycle length and total annual inventory cost.
| Annual cost | At EOQ | At your order size |
|---|---|---|
| Ordering cost (D ÷ Q × S) | $31.62 | $8.00 |
| Holding cost (Q ÷ 2 × H) | $31.62 | $125.00 |
| Total annual inventory cost | $63.25 | $133.00 |
The economic order quantity is √(2DS ÷ H) — annual demand D, cost per order S and annual holding cost per unit H. At that quantity the ordering and holding costs are equal, which is why both columns match at the EOQ; the total there equals √(2DSH). Orders per year are D ÷ EOQ, the cycle length is your operating days ÷ orders per year, and the reorder point is average daily demand × lead time + safety stock. The classic model assumes steady demand, a fixed lead time and no quantity discounts, so treat it as a starting point rather than a purchase order. Everything is computed in your browser and nothing is uploaded.
What is the EOQ Calculator?
The economic order quantity is the order size that makes the total of ordering costs and holding costs as small as possible.
- EOQ from the standard √(2DS ÷ H) formula
- Orders per year and days between orders
- Reorder point from daily demand, lead time and safety stock
- Ordering cost versus holding cost table at EOQ and at your current order size
- Holding cost entered directly or as a percentage of unit cost
- Configurable operating days per year for weekday-only demand
How to use the EOQ Calculator
- 1
Enter annual demand in units and the cost of placing a single order.
- 2
Choose whether to enter holding cost per unit per year directly or as a percentage of unit cost.
- 3
Add supplier lead time in days and your safety stock to get the reorder point.
- 4
Enter the order quantity you currently use to see the cost comparison.
- 5
Read the EOQ, orders per year, cycle length and the annual saving in the table.
About the EOQ Calculator
The economic order quantity is the order size that makes the total of ordering costs and holding costs as small as possible. Order too often and you pay for the paperwork, freight and receiving over and over; order too much at once and you pay to store, insure and finance stock that is not moving. This calculator finds the balance point.
Enter annual demand, the cost of placing one order and the annual cost of holding one unit — either directly or as a percentage of the purchase price — and the tool returns the EOQ, how many orders a year that means, how many days each cycle lasts, and the reorder point from your lead time and safety stock.
It also compares the total annual cost at the EOQ against the total at whatever order size you use today, so the saving is explicit. Everything is computed in your browser and nothing is uploaded. The classic EOQ model assumes steady demand and no quantity discounts, so treat the result as a starting point.
Frequently asked questions
What is the EOQ formula?
EOQ equals the square root of (2 × annual demand × cost per order ÷ annual holding cost per unit). With demand of 1,000 units, an ordering cost of 2 and a holding cost of 1, the EOQ is the square root of 4,000, or about 63 units per order.
Why are ordering and holding costs equal at the EOQ?
Because that is exactly what the formula solves for. Ordering cost falls as order size rises while holding cost climbs, and total cost is lowest where the two curves cross. Seeing both columns match in the results table is a quick check that the calculation is right.
How do you calculate a reorder point?
Multiply average daily demand by the supplier lead time in days, then add safety stock. If you sell 20 units a day, lead time is five days and you hold 50 units of buffer, you reorder when stock hits 150 units.
What holding cost percentage should I use?
Annual holding cost typically runs 15% to 30% of the unit purchase price once you count warehousing, insurance, shrinkage, obsolescence and the cost of the capital tied up. Use your own figures if you have them — the result is sensitive to this input.
When does the EOQ model not apply?
It assumes steady demand, a constant lead time, no stockouts and no quantity discounts. Seasonal demand, volume price breaks or a supplier with a minimum order quantity all break those assumptions, so use the EOQ as a reference point rather than a rule.
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