Calculators
Economic Order Quantity Calculator
Calculate the economic order quantity that minimises ordering and holding costs, with orders per year and total annual cost.
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- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Setting purchase order quantities
- Choosing production batch sizes
- Inventory policy
- Operations management coursework
About this tool
What the Economic Order Quantity Calculator does
The economic order quantity (EOQ) balances two costs: ordering more often raises ordering or setup costs, while ordering larger quantities raises holding costs. EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year).
It also works as a manufacturing EOQ calculator or a EOQ calculator.
Formula
- Holding cost per unit = unit cost × holding %
- EOQ = √(2 × demand × order cost ÷ holding cost per unit)
- Annual cost = (demand ÷ EOQ) × order cost + (EOQ ÷ 2) × holding cost
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Annual demand | 24,000 units |
| Cost per order or setup | $120 |
| Unit cost | $8.00 |
| Annual holding cost | 22% |
| Result | Value |
|---|---|
| Economic order quantity | 1,809 |
| Orders per year | 13.3 |
| Order every | 27.5 days |
| Annual ordering and holding cost | $3,184 |
How to read the result
The total cost curve is flat near EOQ, so rounding to a convenient pack or pallet size costs very little.
Cutting setup costs, the lean approach, lowers EOQ and makes small batches economical.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
The order size that minimises the combined cost of ordering and holding inventory.
Capital, storage, insurance, handling and obsolescence.
Yes, with setup cost in place of ordering cost.
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