Economic Order Quantity Calculator
Economic order quantity estimates a lot size that balances the modeled cost of placing orders with annual inventory holding cost.
How to use this calculator
- Enter annual demand, cost to place one order and annual operating holding cost for one unit.
- Check the labels and units before using a result outside this page.
- Change one input at a time if you want to compare scenarios.
Formula and method
EOQ = √(2 × annual demand × order cost ÷ annual holding cost per unit)
- EOQ = √(2 × annual demand × order cost ÷ annual holding cost per unit)
- The classical formula assumes stable demand, order costs and holding costs; it does not add interest or financing assumptions.
Worked examples
Worked example
Annual demand 10,000 units, order cost 25 currency units, annual holding cost 2 per unit.
EOQ ≈ √(500,000/2) ≈ 500 units.
EOQ ≈ √(500,000/2) ≈ 500 units.
Understanding the result
Economic order quantity estimates a lot size that balances the modeled cost of placing orders with annual inventory holding cost.
The classical formula assumes stable demand, order costs and holding costs; it does not add interest or financing assumptions.
Important notes
The classical formula assumes stable demand, order costs and holding costs; it does not add interest or financing assumptions.
Displayed outputs are rounded for readability; preserve full precision when continuing a calculation.
Frequently asked questions
What does this economic order quantity calculator show?
Economic order quantity estimates a lot size that balances the modeled cost of placing orders with annual inventory holding cost.
Which inputs should I check first?
Enter annual demand, cost to place one order and annual operating holding cost for one unit.
Can the result be used as a final professional specification?
The classical formula assumes stable demand, order costs and holding costs; it does not add interest or financing assumptions.
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Related explanations
Learn the method behind the number or compare the terminology before using the calculator.
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This page provides a calculation tool plus explanatory information so you can understand what the result means and when the underlying method may not fit your situation.