# Economic Order Quantity Calculator

This simple Economic Order Quantity (EOQ) calculator can be used for computing the economic (optimal) quantity of goods or services a firm needs to order. The calculator also offers a visualization of the EOQ model in graphic form.

To utilize this calculator, simply fill in all the fields below and then click the "Calculate EOQ" button.

## What is Economic Order Quantity?

Economic Order Quantity is the ideal size of order that reduces the cost of holding adequate inventory and ordering costs to a minimum. This is one of the world's longest used classical models for production scheduling.

EOQ is calculated on the basis of several assumptions, which include:

• - the ordering cost is always the same
• - the purchase price is always the same
• - demand remains constant and so does lead time
• - order costs do not fluctuate depending on size of order
• - holding costs are reliant on average inventory
• - there is only one product involved in the calculation

The formula below is employed to calculate EOQ:

Economic Order Quantity (EOQ) = (2 × D × S / H) 1/2

Where:

D represents the annual demand (in units),

S represents the cost of ordering per order,

H represents the carrying/holding cost per unit per annum.

Example:   If a company predicts sales of 10,000 units per year, the ordering cost is \$100 per order, and holding cost is \$50 per unit per year, what is the economic order quantity (in units) per order?

EOQ = ( 2 × Annual Demand × Ordering Cost / Holding Cost ) 1/2

EOQ = ( 2 × 10,000 × \$100 / \$50 ) 1/2

EOQ = ( 40,000 ) 1/2 = 200 units per order.

You may also be interested in our Weighted Average Cost of Capital Calculator

EOQ Calculator

units

per order

%

per unit

This simple Economic Order Quantity (EOQ) calculator can be used for computing the economic (optimal) quantity of goods or services a firm needs to order. The calculator also offers a visualization of the EOQ model in graphic form.

To utilize this calculator, simply fill in all the fields below and then click the "Calculate EOQ" button.

## What is Economic Order Quantity?

Economic Order Quantity is the ideal size of order that reduces the cost of holding adequate inventory and ordering costs to a minimum. This is one of the world's longest used classical models for production scheduling.

EOQ is calculated on the basis of several assumptions, which include:

• - the ordering cost is always the same
• - the purchase price is always the same
• - demand remains constant and so does lead time
• - order costs do not fluctuate depending on size of order
• - holding costs are reliant on average inventory
• - there is only one product involved in the calculation

The formula below is employed to calculate EOQ:

Economic Order Quantity (EOQ) = (2 × D × S / H) 1/2

Where:

D represents the annual demand (in units),

S represents the cost of ordering per order,

H represents the carrying/holding cost per unit per annum.

Example:   If a company predicts sales of 10,000 units per year, the ordering cost is \$100 per order, and holding cost is \$50 per unit per year, what is the economic order quantity (in units) per order?

EOQ = ( 2 × Annual Demand × Ordering Cost / Holding Cost ) 1/2

EOQ = ( 2 × 10,000 × \$100 / \$50 ) 1/2

EOQ = ( 40,000 ) 1/2 = 200 units per order.

You may also be interested in our Weighted Average Cost of Capital Calculator

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