EOQ (Economic Order Quantity) is a formula used in inventory management to determine the optimal order size that minimizes total inventory costs. It balances the costs of ordering and holding inventory, helping businesses avoid overstocking and stockouts. EOQ helps ensure that you order the right quantity of a product to minimize overall costs related to storage and replenishment.

Why is Economic Order Quantity (EOQ) important?

EOQ helps businesses maintain optimal inventory levels, balancing ordering and holding costs to minimize total inventory expenses.

How often should EOQ be calculated?

EOQ should be recalculated whenever significant changes occur in demand, ordering costs, or holding costs. Seasonal changes and market fluctuations also affect EOQ.

What if my business faces seasonal demand?

EOQ is most accurate when demand is constant. For businesses with seasonal demand, adjustments or separate EOQ calculations for each season may be required.

Free EOQ Calculator Online | Calculate Economic Order Quantity

Looking for an easy way to calculate your Economic Order Quantity (EOQ)? Our free online EOQ calculator helps businesses determine the optimal order quantity to minimize inventory costs. Whether you’re managing a small business or overseeing a large supply chain, our EOQ tool makes it simple to calculate the right number of units to order while cutting down on unnecessary costs.

How to Use the EOQ Calculator Online

Our EOQ calculator requires just a few inputs:

Annual Demand (D) – The number of units you sell or use in a year.
Ordering Costs (S) – Costs associated with placing an order, including shipping and handling.
Holding Costs (H) – The cost to store one unit in inventory for a year, including warehousing and insurance.

(Instruction: Simply input these values into our EOQ calculator, click ‘Calculate,’ and get your results instantly.)

EOQ Calculator

Annual Demand (D):

Holding Costs (H)

Storage Costs: Insurance Costs: Depreciation and Obsolescence: Cost of Capital (opportunity cost): Security Costs: Taxes on Inventory: Spoilage and Shrinkage: Handling Costs (labor for moving goods): Other Holding Costs:

Ordering Costs (S)

Administrative Costs: Shipping and Transportation Costs: Inspection and Receiving Costs: Costs of Communication: Setup Costs (for production orders): Payment Processing Fees: Supplier Management Costs: Order Tracking and Follow-up Costs: Other Ordering Costs:

Why Use an Online EOQ Calculator?

Calculating EOQ manually can be tedious, especially if you have multiple product lines or fluctuating costs. Our EOQ calculator online simplifies the process by providing quick, accurate results that help you:

EOQ Formula Explained

The EOQ formula is used to calculate the optimal order size by minimizing the total inventory costs:

Examples of Using the EOQ Formula

For example, if your business sells 10,000 units of a product per year, with an ordering cost of $50 and a holding cost of $5 per unit per year, the EOQ calculation would look like this:

This means that the most cost-effective order size for you would be 447 units per order to minimize your overall costs.

What are Ordering Costs and Holding Costs?

By using the EOQ formula, businesses can minimize these costs while maintaining optimal stock levels.