EOQ Calculator

Find the order quantity that minimizes ordering cost and holding cost combined, using the classic economic order quantity formula.

Your numbers

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Demand and ordering

Annual demand

units/yr

Cost to place one order

Purchasing time, receiving and freight admin for one purchase order, not the goods themselves.

Holding cost

Cost per unit

Annual holding cost (% of unit cost)

A common starting range is 15–30% a year: capital, storage, insurance, shrinkage and obsolescence combined. Build your own figure with the inventory carrying cost calculator.

Your result · updates as you type

Economic order quantity

447 units

Ordering 447 units at a time minimizes total ordering plus holding cost: about $1,342 a year. That's 13.4 orders a year, roughly every 27 days.

Orders per year: 13.4
Days between orders: 27 days
Total ordering + holding cost/yr: $1,342

EOQ ignores supplier minimum order quantities and quantity price breaks. If your supplier's MOQ or a price break sits near this number, compare the total cost at that quantity too before you commit.

Total annual cost at other order sizes

0.5× EOQ

$1,677

0.75× EOQ

$1,398

EOQ

$1,342

1.25× EOQ

$1,375

1.5× EOQ

$1,453

2× EOQ

$1,677

Breakdown

Order cost per year (orders × cost/order): $671
Holding cost per year (EOQ ÷ 2 × holding $/unit): $671
Holding cost per unit per year: $3.00
Total cost per year at EOQ: $1,342

The EOQ formula

Order too little at a time and you pay for freight, receiving and admin too often. Order too much and you tie up cash and pay to store it. EOQ is the order size where those two costs are equal, which is also where their total is lowest.

EOQ = √(2 × annual demand × cost per order ÷ annual holding cost per unit)

Example: the default numbers

Annual demand: 6,000 units
Cost to place one order: $50
Holding cost per unit: $12 × 25% = $3/yr

EOQ = √(2 × 6,000 × 50 ÷ 3) = √200,000 ≈ 447 units, ordered about 13.4 times a year (every 27 days), for a total ordering plus holding cost of about $1,342 a year.

Getting the holding cost right

EOQ is only as good as your holding cost percentage. It should include the cost of the capital tied up, storage, insurance, shrinkage and obsolescence, not just warehouse rent. Build it category by category with the inventory carrying cost calculator and use that total % here instead of guessing.

What EOQ ignores

Supplier minimum order quantities. If your MOQ is above EOQ, you're paying the MOQ's total cost, not EOQ's. Compare the two before you assume EOQ is achievable.
Quantity price breaks. A discount at a bigger order size can beat EOQ's lower carrying cost. Run the total cost at the break quantity and compare.
Demand swings. EOQ assumes steady demand. For seasonal products, recalculate it for the season you're ordering into, or lean on the inventory forecast tool instead.

Questions people ask

What does EOQ stand for?

Economic order quantity: the order size that minimizes the combined cost of placing orders and holding stock.

What if my supplier's MOQ is bigger than the EOQ result?

Order the MOQ. EOQ tells you the theoretical minimum-cost quantity, but you can't order less than your supplier allows.

What holding cost percentage should I use?

15–30% of unit cost a year is a common starting range, covering capital, storage, insurance, shrinkage and obsolescence. Build your own figure with the inventory carrying cost calculator rather than guessing.

Does a higher order cost push EOQ up or down?

Up. If it costs more to place each order, the formula orders bigger and less often to spread that cost over more units.

Last reviewed 30 September 2026.