Economic Order Quantity
Balance ordering and inventory holding costs.
Your numbers
Economic order quantity
Assumes constant demand, instant replenishment, no shortages, no bulk discounts and an unlimited shelf life.
Scenario comparison
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Formula
Use EOQ = √(2DS/H). D is annual demand in units, S is cost per order, and H is annual holding cost per unit. The result balances modeled ordering and holding costs.
Balance ordering and inventory holding costs.
Worked example
- Annual demand units
- 10000
- Cost per order
- 50
- Annual holding cost per unit
- 2
- Economic order quantity
- 707.106781187 units
- Orders per year
- 14.1421356237
- Annual ordering plus holding cost
- 1,414.21356237
Scope and limitations
Assumes constant demand, instant replenishment, no shortages, no bulk discounts and an unlimited shelf life.
Inputs are checked for missing values and allowed ranges. A result outside the finite numeric range is not displayed. Rounding affects display, while the calculation uses the model’s numeric precision.
Check your units and assumptions before relying on a result. Changing a label does not convert a currency or physical unit.
Formula version: c308f787ee9e · Example checked: