Economic order quantity
Balance annual ordering and holding costs in a constant-demand inventory model.
Your starting point
LOCAL · PRIVATESample values are filled in. Change them to make this your own.
A little more clarity
RESULTYour result will appear here.
Run the sample to see how it works.Use this tool
- Enter demand for an entire year.
- Enter fixed ordering cost and holding cost for one unit for that same year.
- Calculate, then adapt the theoretical units to supplier pack rules separately.
Reading your result
EOQ balances annual ordering and holding costs. Orders per year is theoretical, not a rounded purchasing schedule; product acquisition cost is excluded from the cost metric.
How this works
EOQ = √(2 × annual demand × order cost ÷ annual unit holding cost).
Use the units shown beside each field. For monetary amounts, use one currency throughout; calculations do not convert currencies. Results normally display up to two decimal places. Nonzero values below 0.01 use up to six significant digits; values below 0.000001 use scientific notation (for example, 1E-7 means 0.0000001). Rankings use unrounded values, so displayed scores can look equal without being tied. CSV downloads retain numeric precision. Monetary rounding uses half-away-from-zero. Inputs or results beyond supported precision are rejected.
Method reference: CFI, Economic Order Quantity.
Assumptions & limits
Continuous theoretical optimum. Assumes steady demand, immediate replenishment, no shortages or quantity discounts. Round to feasible packs separately.
Required numeric fields reject blank, malformed and out-of-range values; negative values are allowed only for inventory position. Whole quantities are validated where units must be indivisible.
Results are planning aids based on the values you enter. Check important decisions and documents before using or sharing them.
