Money & shopping
Economic order quantity
Explore the basic constant-demand inventory order model.
A clear answer. Here’s how.
Basic EOQ = sqrt(2 × annual demand × fixed order cost / annual holding cost per unit). Shows theoretical order size, orders per year and relevant ordering plus holding cost. Assumes constant demand, instantaneous replenishment, no stockouts or quantity discounts. Fractional theoretical units are shown before any purchasing decision.
See a worked example
Worked example
A fixed demonstration, separate from the values you enter above.
- Annual demand (units)
- 10000
- Fixed cost per order
- 40
- Annual holding cost per unit
- 2
Example result
- Theoretical order quantity
- 632.455532034
- Theoretical orders per year
- 15.8113883008
- Annual ordering cost
- 632.46
- Annual holding cost
- 632.46