Economic Order Quantity (EOQ) Calculator

The Economic Order Quantity Calculator works out the order size that keeps your total inventory costs as low as possible, balancing the cost of placing orders against the cost of holding stock. You enter your annual demand in units, the fixed cost of placing a single order, and the cost of holding one unit in stock for a year. The tool applies the classic EOQ formula, the square root of two times annual demand times order cost, divided by the holding cost per unit, and returns your economic order quantity along with the number of orders you would place each year. Order in larger batches and you place fewer orders but carry more stock and tie up more cash. Order in small batches and you hold less but pay more ordering, freight and admin costs. The EOQ is the sweet spot where these two costs are in balance and the combined total is at its lowest. Purchasing managers, store owners and operations staff use it to set sensible reorder quantities and to challenge habits like ordering a round number out of convenience. A few cautions help you use it well. The model assumes steady demand and stable costs, so treat the result as a strong starting point rather than a rigid rule, and adjust for seasonality, bulk discounts and minimum order sizes. Keep your holding cost realistic by including storage, insurance, capital and the risk of obsolescence, not just warehouse rent. Round the answer to a practical pack or pallet quantity, then recheck your reorder point and safety stock so you do not run short between deliveries.

EOQ = square root of (2 x annual demand x order cost / holding cost). Orders per year = annual demand / EOQ. Estimate only, not financial or tax advice.