CalcLibrary

Economic Order Quantity (EOQ) Calculator

Choose how many units to order each time for a repeat inventory purchase. This EOQ calculator balances ordering cost and annual holding cost under a steady-demand assumption, then translates the answer into orders per year, operating cadence, and an optional comparison with your current batch size.

Currency
units/year
$
$
days
units
Examples

48,000 units of annual demand, 120 of ordering cost, and 2.4 of annual holding cost gives an EOQ of about 2,191 units. If the current batch is 800 units, the policy sits below EOQ and carries materially higher annual relevant cost.

Economic order quantity (EOQ)
2,190.89 units/order
Orders per year
21.91 orders/year
Time between orders
11.4 operating days
Annual ordering cost at EOQ
$2,629.07
Annual holding cost at EOQ
$2,629.07
Total relevant annual inventory cost at EOQ
$5,258.14
Current policy vs EOQ
Current quantity is below the EOQ
Current annual ordering + holding cost
$8,160.00
Annual cost difference vs EOQ
$2,901.86

Your current batch is smaller than the EOQ, so extra order frequency is driving the gap.

Steady-demand estimate only. Supplier minimums, price breaks, spoilage, taxes, shipping tiers, and volatile demand can change the practical order quantity even when the EOQ math is correct.

Was this useful?

Examples

How It Works

Formula

Q∗=2DSHQ^* = \sqrt{\frac{2DS}{H}}

N=DQ∗N = \frac{D}{Q^*}

Corder=DQ∗×SC_{\text{order}} = \frac{D}{Q^*} \times S

Chold=Q∗2×HC_{\text{hold}} = \frac{Q^*}{2} \times H

Ctotal=Corder+CholdC_{\text{total}} = C_{\text{order}} + C_{\text{hold}}

T=ONT = \frac{O}{N}

Variables

DD

Annual demand(units/year)

SS

Ordering cost per order(currency/order)

HH

Annual holding cost per unit(currency/unit/year)

Q∗Q^*

Economic order quantity(units/order)

NN

Orders placed per year at the EOQ(orders/year)

TT

Operating days between orders when operating days per year are provided(operating days/order cycle)

EOQ treats recurring replenishment as a tradeoff between two opposing costs. Smaller batches reduce average inventory on hand, so annual holding cost falls, but they force you to place more orders, so annual ordering cost rises. Larger batches do the opposite. The EOQ is the point where those two annual cost pressures meet.

Because the model uses annual demand and annual holding cost, every cost on the page must share the same currency and the same annual basis. Units can be pieces, cartons, kilograms, liters, or any other product unit, as long as annual demand and order quantity use that same unit consistently.

The calculator first solves Q∗=2DS/HQ^* = \sqrt{2DS/H} for the economic order quantity. It then converts that batch size into orders per year, optional operating days between orders, and the annual ordering and holding cost implied by the EOQ.

If you enter a current order quantity, the calculator prices that current policy with the same annual ordering-plus-holding framework. That comparison is intentionally narrow: it is a steady-demand estimate, not a full procurement optimizer or forecasting engine.

Frequently Asked Questions

01What does EOQ actually tell me?
EOQ estimates the batch size where annual ordering cost and annual holding cost balance under a steady-demand assumption. It answers one narrow question well: how many units should I buy each time for routine replenishment if demand and cost assumptions stay reasonably stable.
02Why do demand and holding cost need to be annual?
The classic EOQ formula uses annual demand and annual holding cost. If demand is monthly or holding cost is quarterly, convert both to an annual basis before using the calculator. Mixing time bases is the fastest way to get a misleading result.
03What if my supplier has minimums, price breaks, or shipping tiers?
Then EOQ becomes a baseline, not the final policy. Supplier minimums, discount tiers, spoilage, taxes, shipping breaks, and similar real-world constraints can move the practical order quantity away from the mathematical optimum shown here.
04How is this different from a reorder point calculator?
Reorder point answers when to order based on usage and lead time. EOQ answers how much to order each time once you are already planning routine replenishment. They solve different inventory decisions and often belong together, not in place of each other.

All calculators