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Economic Order Quantity (EOQ) Calculator

Find the order size that keeps the cost of placing orders and the cost of holding stock as low as possible. Add your supplier's minimum order and case pack to get a quantity you can actually buy, and compare it with what you order today.

Questions

What is the EOQ formula?
EOQ = √(2 × D × S ÷ H), where D is annual demand in units, S is the cost of placing one order and H is the cost of holding one unit for a year. At that quantity the yearly ordering cost and the yearly holding cost are equal, and their total is at its lowest.
What counts as ordering cost?
Costs that come with each order whatever its size: the time to raise, send and chase the purchase order, per order supplier or bank fees, receiving and inspection, and any fixed charge per shipment. Do not include the price of the goods.
What counts as holding cost?
The yearly cost of keeping one unit in stock, written here as a percentage of its unit cost: the cost of the cash tied up, storage, insurance, shrinkage and the risk the stock goes out of date. Marketplace storage fees can make it much higher than a warehouse alone, so work it out from your own costs.
What if my supplier has a minimum order quantity?
If the MOQ is above your EOQ you order the MOQ. The calculator shows the extra yearly cost of doing so, so you can decide whether to negotiate a lower minimum. It also rounds up to full case packs.
How exact does my order quantity need to be?
Not very. The total cost curve is flat near the EOQ: ordering 20% more than the EOQ raises the combined ordering and holding cost by under 2%, and ordering 20% less raises it by 2.5%. Rounding to a case pack or a sensible number usually costs very little.
When is EOQ the wrong answer?
EOQ assumes steady demand, a fixed unit price and costs that do not change with order size. With strong seasonality, volume discounts, shelf life limits or tight cash, treat it as a starting point and adjust.