Economic Order Quantity CalculatorFree online financial calculator — instant results, no sign-up
Calculate EOQ under constant demand with fixed ordering and annual per-unit holding costs.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Economic Order Quantity Calculator
The Economic Order Quantity Calculator estimates the order quantity that minimizes annual ordering and inventory holding costs under constant demand. It uses annual demand, a fixed cost per order, and an annual holding cost per unit to calculate EOQ, orders per year, and the combined annual ordering and holding cost.
- Annual demand (units)
- The total quantity expected to be needed in one year, measured in units per year, with a default of 12000.
- Cost per order ($)
- The fixed expense incurred each time an order is placed, measured in dollars per order, with a default of 75.
- Annual holding cost per unit ($)
- The cost of keeping one unit in inventory for one year, measured in dollars per unit per year, with a default of 6.
Formula and method
Q* = sqrt(2DS/H); N = D/Q*; C = (D/Q*)S + (Q*/2)H. With the default inputs: Q* = sqrt(2 × 12000 × 75 / 6) = 547.7226 units; N = 12000/Q* = 21.9089 orders per year; C = (12000/Q*) × 75 + (Q*/2) × 6 = $3,286.34. Displayed results are rounded; calculations use the unrounded Q*.
- DAnnual demand in units per year.
- SFixed ordering cost in dollars per order.
- HAnnual holding cost in dollars per unit per year.
- Q*Economic order quantity, or the cost-minimizing number of units per order.
- NAverage number of orders required per year at the economic order quantity.
- CCombined annual ordering and holding cost in dollars, excluding purchase costs.
For positive inputs, calculate EOQ by multiplying annual demand by twice the cost per order, dividing by annual holding cost per unit, and taking the square root. Divide annual demand by the unrounded EOQ to obtain orders per year. Multiply orders per year by the cost per order to find annual ordering cost, then add annual holding cost calculated from average inventory of EOQ divided by two. At the theoretical optimum, these two cost components are equal.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Annual demand12000 units
- Cost per order75 $
- Annual holding cost per unit6 $
Results
- Economic order quantity547.7226
- Orders per year21.9089
- Annual ordering plus holding cost$3,286.34
How to use the Economic Order Quantity Calculator
- 1Enter annual demand in units; use 12000 to reproduce the default example.
- 2Enter the fixed cost per order in dollars; the default example uses 75.
- 3Enter the annual holding cost for one unit in dollars; the default example uses 6, not a holding-cost percentage.
- 4Read the calculated results: an economic order quantity of 547.7226, orders per year of 21.9089, and annual ordering plus holding cost of $3,286.34.
- 5Before using the EOQ operationally, check nearby feasible whole-unit or pack-size quantities and confirm that supplier and storage constraints permit them.
Reading your result
Economic order quantity is the theoretical cost-minimizing order size: 547.7226 units with the default inputs. Orders per year is annual demand divided by EOQ: 21.9089 represents an average ordering frequency, not a requirement to place a fractional order in a calendar year. Annual ordering plus holding cost is $3,286.34 at the unrounded EOQ; it includes the cost of placing orders and carrying average inventory, but not the cost of purchasing the units.
Limitations
The basic EOQ model assumes known, constant demand, fixed ordering cost, constant annual per-unit holding cost, replenishment arriving as a complete batch, and no shortages. It excludes safety stock, quantity discounts, capacity limits, minimum order quantities, and changes in demand or costs. Lead time is not an input, so this calculator does not determine a reorder point. The formula treats order size as continuous; whole-unit or pack-size constraints may change the practical choice. Demand, ordering cost, and holding cost should all be positive for the stated calculation.
Common questions
Should I enter the purchase price as the cost per order?+
No. Enter the fixed expense associated with placing and processing one order, rather than the purchase price of its units. If the unit purchase price is constant regardless of order size, annual purchase spending does not affect the basic EOQ optimum and is excluded from the reported cost.
What if my annual holding cost is expressed as a percentage?+
Convert it to dollars per unit per year before entering it. Multiply the unit value by the annual holding-cost rate expressed as a decimal, and include any additional per-unit annual carrying costs not already covered by that rate.
How should I use an EOQ of 547.7226 when I must order whole units?+
Compare the annual ordering plus holding costs for the feasible whole-unit quantities immediately below and above the EOQ using C(Q) = DS/Q + HQ/2. If orders must be in packs or meet minimum quantities, compare the feasible quantities around the EOQ instead.
Does EOQ tell me when to place the next order?+
No. EOQ determines how much to order, while orders per year indicates average frequency. The reorder point requires demand during replenishment lead time and, when uncertainty matters, an allowance for safety stock.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.