Maker Label Studio

Finance & Supply Chain

EOQ Calculator

Calculate economic order quantity, expected order frequency, annual inventory cost, and reorder point from core demand and cost assumptions.

Inventory inputs

Use annual values for demand and holding cost. Reorder point uses daily demand, lead time, and safety stock.

Optional, used in CSV and JSON exports.
Units demanded per year.
Fixed cost to place one order.
Annual carrying cost for one unit.
Days from order placement to receipt.
Average units demanded per day.
Buffer units held above lead-time demand.
Formula category: Finance & Supply Chain. EOQ = sqrt((2 x D x S) / H). Total annual cost = (D / EOQ x S) + (EOQ / 2 x H). Reorder point = daily demand x lead time + safety stock.

Results

Calculated with the EOQ inventory model.

Economic order quantity
Not calculated
Recommended order quantity.
Orders per year
Not calculated
Annual demand divided by EOQ.
Total annual cost
Not calculated
Ordering cost plus holding cost.
Reorder point
Not calculated
Lead-time demand plus safety stock.
Ordering cost at EOQNot calculated
Holding cost at EOQNot calculated
Lead-time demandNot calculated

Calculation self-tests

Self-tests have not been run.

EOQ report

SKU or itemNot calculated
Annual demand (D)Not calculated
Order cost (S)Not calculated
Annual holding cost per unit (H)Not calculated
Lead timeNot calculated
Daily demandNot calculated
Safety stockNot calculated
EOQNot calculated
Orders per yearNot calculated
Total annual costNot calculated
Reorder pointNot calculated

About the EOQ (Economic Order Quantity) Calculator

EOQ helps inventory planners estimate the order quantity that balances ordering expense against carrying cost for a steady-demand item. Enter annual demand, setup or purchase order cost, and annual holding cost per unit to compare order size, order frequency, and total relevant cost without relying on guesswork or round-number purchasing habits.

How it works

  1. Enter annual demand in units.
  2. Add the fixed cost to place one order or production setup.
  3. Enter annual holding cost per unit, including capital, storage, shrink, and insurance where relevant.
  4. Review the recommended order quantity, orders per year, total cost, and reorder point.

Frequently asked questions

What assumptions does the EOQ model make?

The basic model assumes steady demand, a known ordering cost, a known holding cost, and immediate replenishment. It is less reliable for highly seasonal items, quantity discounts, capacity limits, or uncertain lead times.

What should I include in holding cost?

Holding cost can include cost of capital, warehouse space, insurance, obsolescence, damage, and shrink. It should be an annual cost per unit, not the unit purchase price unless you are converting a carrying-rate percentage.

How is reorder point different from order quantity?

Order quantity says how much to buy. Reorder point says when to buy, usually based on expected demand during lead time plus any safety stock.

Does EOQ account for supplier price breaks?

The classic formula does not. If quantity discounts are material, compare total purchase, ordering, and carrying cost at each price break.

Can EOQ be used for production batches?

Yes, when setup cost and carrying cost are known, but production runs may need a production quantity model if replenishment happens gradually rather than all at once.

References