Finance

EOQ Calculator (Economic Order Quantity)

Find the optimal order quantity that minimizes total inventory holding and ordering costs.

Annual Demand (D) (units)

Order Cost (S) ($/order)

Holding Cost (H) ($/unit/yr)

Lead Time (days)

Formula:
EOQ = √(2DS / H)
Number of Orders = D / EOQ
Reorder Point = Daily Demand × Lead Time
Total Cost = (D/Q)×S + (Q/2)×H

What is EOQ?

EOQ is the order quantity that minimizes the total cost of inventory management. It balances the trade-off between ordering costs (more orders = more cost) and holding costs (larger orders = more storage cost).