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Economic Order Quantity (EOQ) Calculator

Optimize your inventory costs by finding the ideal order quantity. Balance ordering costs and holding costs effectively.

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Use Holding Cost %
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Economic Order Quantity (EOQ)
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The optimal number of units to order at one time.
Orders Per Year
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Number of times you should place an order annually.
Total Annual Cost
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Combined ordering and holding costs at this EOQ.

How EOQ is Calculated

The Economic Order Quantity (EOQ) formula helps you find the 'sweet spot' where the combination of ordering costs and holding costs is minimized.

EOQ = √[(2 × D × S) / H]

Where:

  • D = Annual Demand (units)
  • S = Order Cost (per order)
  • H = Holding Cost (per unit per year)

Why Use an EOQ Calculator?

Understanding your EOQ brings several advantages to your inventory management.

📉 Reduce Inventory Costs

Minimize the total cost of ordering and holding inventory.

💰 Optimize Cash Flow

Free up capital by not overstocking inventory.

⚡ Prevent Stockouts

Ensure you have enough stock to meet demand without excess.

Frequently Asked Questions

What is EOQ?
Economic Order Quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.
When should I use EOQ?
EOQ is best used when demand, ordering, and holding costs are relatively constant over time.
How do I calculate Holding Cost?
Holding cost can be a fixed amount per unit or calculated as a percentage of the unit value (typically 20-30% to cover storage, insurance, and opportunity cost).

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