EOQ Calculator
Calculate EOQ step by step: EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year).
In short
Formula: EOQ = √(2 × D × S ÷ H), where D = annual demand, S = cost per order, H = holding cost per unit per year.
What this calculator does
Calculate EOQ step by step: EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year). Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Annual demand, Cost per order, Holding cost per unit per year into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this inventory calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Annual demand
- — number value.
- Cost per order
- — number value.
- Holding cost per unit per year
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
Classic Harris–Wilson economic order quantity, as defined in the ASCM (APICS) dictionary.
At the EOQ, annual ordering cost equals annual holding cost.
Assumes steady, known demand, instant replenishment and no quantity discounts.
EOQ = √(2 × D × S ÷ H), where D = annual demand, S = cost per order, H = holding cost per unit per year.
Inputs used: Currency (symbol only, never converted), Annual demand, Cost per order, Holding cost per unit per year.
Worked example
Packaging supplies
- 2 × 10,000 × 50 ÷ 2 = 500,000.
- √500,000 = 707.11 units.
- About 14.1 orders a year.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Assumes constant demand.
- Ignores price breaks.
- Ignores lead-time variability and safety stock.
- Results are planning estimates built only from the figures you enter. No prices, rates, demand patterns or service levels are built in, and the results are not supplier quotes or carrier rates.
- The result depends on the values you enter for this eoq calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
What goes into cost per order?
Costs that occur each time you place and receive an order: purchasing time, receiving, inspection and fixed delivery fees. Not the price of the goods.
How do I get holding cost?
Use the carrying cost calculator. It is often expressed as a percentage of unit value per year; multiply that by the unit cost.
What if my supplier has a minimum order?
Use the MOQ analysis calculator to see the extra cost of ordering above the EOQ. Check the formula, example, and limitations on this page before using the result for a real inventory decision.
How do I use the EOQ Calculator?
Enter the required values for Currency (symbol only, never converted), Annual demand, Cost per order, Holding cost per unit per year. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the EOQ Calculator use?
EOQ = √(2 × D × S ÷ H), where D = annual demand, S = cost per order, H = holding cost per unit per year. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.
Can the EOQ Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
Related tools
Calculate Reorder Point step by step: reorder point = average daily demand × lead time + safety stock.
Calculate Safety Stock with your chosen method: fixed days of cover, z × σd × √L, or combined demand and lead-time variability.
Calculate Inventory Turnover step by step: cost of goods sold ÷ average inventory.
Calculate Inventory Days step by step: average inventory ÷ cost of goods sold × days in period.
Calculate Carrying Cost step by step: capital cost + storage + insurance and taxes + obsolescence and shrinkage.
Calculate Stock Coverage step by step: (on hand + on order) ÷ expected daily demand.