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Economic Order Quantity Calculator

Calculate the classic economic order quantity, estimated orders per year and average cycle inventory.

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Economic Order Quantity —
Estimated Orders Per Year —
Average Cycle Inventory —

Calculator guide

Balance ordering and holding cost with EOQ

EOQ estimates the order size that balances annual ordering cost with annual inventory holding cost. Enter annual demand, cost per order and annual holding cost per unit.

The classic model assumes stable demand, constant lead time, immediate replenishment, no stockouts and no quantity discounts. Real operations often violate one or more assumptions.

The result excludes safety stock. Combine EOQ with a separate reorder point and safety-stock policy to determine both how much and when to order.

Validate supplier minimums, case packs, storage limits, expiry, cash constraints and discount tiers before adopting the mathematical result.

Formula

Balance ordering and holding cost with EOQ

EOQ = √(2 × Annual demand × Ordering cost per order ÷ Annual holding cost per unit)

  1. Multiply annual demand by ordering cost and two.
  2. Divide by annual holding cost per unit.
  3. Take the square root.
  4. Compare with supplier and storage constraints.

Worked example

Worked example

Inputs

Scenario
With 12,000 units annual demand, $50 per order and $2 annual holding cost per unit, EOQ is about 775 units and roughly 15.5 orders per year.

Results

Result
With 12,000 units annual demand, $50 per order and $2 annual holding cost per unit, EOQ is about 775 units and roughly 15.5 orders per year.

Rounded planning example; replace assumptions in the live calculator.

Frequently asked questions

Economic Order Quantity Calculator FAQ

What should I verify before using this calculator?

Verify the reporting period, included cost categories, units, currency and source records. Save those assumptions with the result.

How accurate is the result?

The arithmetic follows the displayed formula. Accuracy depends on complete inputs, consistent definitions and values from the same reporting period.

Can I use another currency?

Yes. Keep every monetary input in the same currency. The calculator does not convert exchange rates.

Should I use forecast or actual data?

Use actual data for performance review and documented assumptions for planning. Label forecasts clearly and compare them with actual results later.

Why should I compare several periods?

One period can be distorted by seasonality, promotions, delayed payments or unusual purchases. A consistent trend is more informative.

Is this accounting, tax or professional advice?

No. It is an independent planning tool. Reconcile results with your accounting records and qualified advisers where required.

Are my inputs uploaded?

No. Calculator inputs are processed locally in the browser and do not need to be sent to a server.

Primary sources

Official references and further reading

Editorially reviewed: 2026-07-21

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