Free EOQ calculator

This free EOQ calculator finds the order size with the lowest ordering cost plus holding cost.

Free EOQ calculator: find the economic order quantity from annual demand, cost per order and holding cost. Runs in your browser, nothing uploaded.

Sources checked: .

Your numbers

Order cost is everything it costs you to place one order, such as buyer time, freight and receiving. Holding cost is what it costs to keep one unit for a year. Numbers only, up to 6 decimal places, no commas.

Economic order quantity: 707.1 units

Rounded up: 708 units per order, which means about 16.9 orders a year.

Ordering plus holding cost at 708 units per order: $1697.06 a year. This leaves out the price of the goods.

Round to your case pack and supplier minimum before you order.

How the EOQ calculator works

Economic order quantity (EOQ) is the order size where the cost of ordering and the cost of holding stock add up to the least. Small orders mean many orders and high ordering cost. Big orders mean a lot of stock sitting on shelves and high holding cost. EOQ finds the balance.

The formula is EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year). Everything runs in your browser. Nothing you type is sent or saved.

What each input means

  • Annual demand: units you expect to sell in a year.

  • Cost to place one order: buyer time, freight, receiving and any fixed fee. Count what changes with each order, not rent or salaries that stay the same.

  • Holding cost per unit per year: the cost of keeping one unit for a year, including the money tied up in it, storage, insurance and shrink.

Worked example

Demand = 12,000 units a year, order cost = $50, holding cost = $2.40 per unit a year. EOQ = √(2 × 12,000 × 50 ÷ 2.40) = √500,000 = 707.1 units, or 708 rounded up.

That means about 17 orders a year. Ordering costs 17 × $50 = $849. Holding costs an average of 354 units × $2.40 = $849. The total is about $1,697 a year, and the two costs are equal, which is how you know you are at the EOQ.

Compare a simple habit of ordering 1,000 units every month. Ordering costs 12 × $50 = $600 and holding costs 500 × $2.40 = $1,200, so the total is $1,800. EOQ saves about $103 a year on this one item. Across hundreds of SKUs, it adds up.

When this formula is wrong

  • The supplier has a minimum order, a case pack or price breaks. EOQ ignores them, so round the result to what the supplier will really ship.

  • Freight gets cheaper at a threshold, such as free shipping above a set amount. Test that order size against the EOQ.

  • Demand is seasonal or changing fast. EOQ assumes steady demand through the year.

  • The goods expire or go out of fashion. The shelf life may matter more than the cost balance.

  • Your holding cost is a guess. A bad holding cost gives a bad answer, so check it with your finance team.

  • It does not say when to order. Use the reorder point and safety stock for that.

Where to go next

FAQ

Frequently asked questions

The one that matches your own costs. It rises when ordering is expensive or demand is high, and falls when holding stock is expensive.

Order at least the minimum. If the EOQ is lower than the minimum, order the minimum. If it is higher, round up to the nearest case pack.

EOQ is how much to order. The reorder point is when to order. You need both.

No. The calculation runs in your browser. Nothing is uploaded, stored or tracked.

Start with your workflow

Bring one inventory, purchasing or order-management problem. We will map the required data, demonstrate the relevant workflow and identify what needs configuration or further validation.

Book a demo