inventory
ProEconomic Order Quantity (EOQ) Calculator
EOQ uses the Wilson formula sqrt(2 * D * S / H) where D is annual demand, S is order cost, and H is holding cost per unit per year. Use it to balance ordering frequency against carrying cost.
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Examples
Stable demand SKU
D=12000 units/yr, S=$50/order, H=$3/unit/yr gives EOQ of about 632 units.
Frequently Asked Questions
What is EOQ?
The order size that minimizes the sum of ordering and holding costs over a year.
When does EOQ break down?
When demand is highly variable, when suppliers enforce MOQs, or when prices change with volume.