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EOQ Calculator: Economic Order Quantity
Enter your annual demand, what placing an order costs you, and what holding a unit for a year costs. The calculator finds the order quantity where those two costs balance.
Economic order quantity
269 units
EOQ = √(2 × annual demand × order cost ÷ holding cost). The order size where ordering costs and holding costs balance.
Orders per year
8.9
About one order every 5.8 weeks. Round to the supplier's case packs and MOQ — EOQ is a target, not a law.
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The formula
EOQ = √(2 × annual demand × order cost ÷ holding cost per unit per year). Order more at a time and you pay more to hold stock; order less and you pay ordering costs more often. EOQ is the minimum of that curve.
Using it honestly
The inputs are estimates — holding cost especially, which should include tied-up cash, storage, insurance and shrinkage. Treat the EOQ as a sanity check on your ordering habit, then round to case packs and supplier MOQs. The curve is flat near the minimum, so being roughly right is enough.
Full walkthrough: How to write a purchase order.
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Frequently asked questions
What is economic order quantity in simple terms?
It's the order size that makes ordering and holding costs together as small as possible. Big orders mean fewer purchase orders but more money sitting on shelves; small orders mean the reverse. EOQ is the balance point.
What counts as holding cost in the EOQ formula?
Everything it costs to keep one unit in stock for a year: the capital tied up in it, storage or 3PL fees, insurance, and shrinkage or obsolescence. Many merchants approximate it as 20–30% of the unit's cost per year, but your own storage bills are better than any rule of thumb.
Does EOQ work for seasonal products?
Only partially. EOQ assumes steady demand through the year, so for seasonal items use it on the baseline and plan the peak separately with a demand forecast. For short-season or trend products, sell-through planning matters more than EOQ.
What if the EOQ is below my supplier's minimum order quantity?
Order the MOQ — you don't have a choice — but now you know what the constraint costs you in excess holding. That number is useful leverage: it tells you how much a lower MOQ or a second, smaller-batch supplier would actually be worth.