MOQ Analysis Calculator
Calculate the extra annual cost of a supplier minimum order quantity compared with your EOQ.
In short
Formula: Total relevant cost TC(Q) = D ÷ Q × S + Q ÷ 2 × H. Extra cost = TC(max(EOQ, MOQ)) − TC(EOQ).
What this calculator does
Calculate the extra annual cost of a supplier minimum order quantity compared with your EOQ. 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, and the other shown inputs 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.
- Supplier minimum order quantity
- — 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
Uses the EOQ cost model (ASCM dictionary) to price a minimum order constraint.
Price discounts are not included; weigh them against the extra cost shown.
Large MOQs also raise obsolescence risk, which this model does not capture.
Total relevant cost TC(Q) = D ÷ Q × S + Q ÷ 2 × H. Extra cost = TC(max(EOQ, MOQ)) − TC(EOQ).
Inputs used: Currency (symbol only, never converted), Annual demand, Cost per order, Holding cost per unit per year, Supplier minimum order quantity.
Worked example
MOQ above EOQ
- EOQ = 707.11; TC = 1,414.21.
- TC(1,500) = 333.33 + 1,500 = 1,833.33.
- Extra = $419.12 per 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
- No price breaks modelled.
- No shelf-life or obsolescence term.
- Constant demand.
- 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 moq analysis calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
Should I accept the MOQ?
If the per-unit discount × annual demand exceeds the extra cost (and the extra stock will not go obsolete), it can pay off. Check the formula, example, and limitations on this page before using the result for a real inventory decision.
Can I negotiate?
This figure gives you a concrete cost to bring to the conversation. Check the formula, example, and limitations on this page before using the result for a real inventory decision.
What about shelf life?
Check months of demand per order against shelf life; the model ignores expiry. Check the formula, example, and limitations on this page before using the result for a real inventory decision.
How do I use the MOQ Analysis Calculator?
Enter the required values for Currency (symbol only, never converted), Annual demand, Cost per order, Holding cost per unit per year, Supplier minimum order quantity. 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 MOQ Analysis Calculator use?
Total relevant cost TC(Q) = D ÷ Q × S + Q ÷ 2 × H. Extra cost = TC(max(EOQ, MOQ)) − TC(EOQ). 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 MOQ Analysis 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 EOQ step by step: EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year).
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.