EOQ Calculator — Economic Order Quantity

Find the order size that minimises the combined cost of placing orders and holding stock.

Annual demand

units / year

Cost per order

₹

Admin, freight, inspection — cost of placing one order.

Holding cost per unit per year

₹

Storage, insurance, capital cost — often 15–30% of unit cost.

Supplier lead time

days

Safety stock

units

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How to use the EOQ Calculator — Economic Order Quantity

Enter how many units you use or sell per year.
Enter the fixed cost of placing one purchase order.
Enter the cost of holding one unit in stock for a year.
Add supplier lead time and safety stock to get the reorder point.

Formula used

EOQ = √(2 × D × S ÷ H)

D = annual demand, S = cost per order, H = holding cost per unit per year.

Total cost = (D ÷ Q) × S + (Q ÷ 2) × H · Reorder point = (D ÷ 365) × lead time + safety stock

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EOQ Calculator — Economic Order Quantity — FAQs

What is EOQ?▾

Economic order quantity is the order size that minimises the total of ordering costs and holding costs for an item with steady demand.

How do I estimate holding cost?▾

Add storage, insurance, shrinkage and the interest cost of money tied up in stock. A common estimate is 20–25% of the item's cost per year.

When is EOQ not suitable?▾

When demand is highly seasonal, suppliers offer quantity discounts, or items are perishable. Adjust the order quantity for those constraints.

What is a reorder point?▾

The stock level at which you place the next order, so the new stock arrives just as the safety stock is reached.

How to use the EOQ Calculator — Economic Order Quantity

Formula used

EOQ Calculator — Economic Order Quantity — FAQs

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