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Economic order quantity (EOQ) calculator

How many to order each time so that the cost of placing orders and the cost of holding stock, together, are as low as they can be.
Order quantity
447 units
Orders per year
8.94
Days between orders
40.8 days

How it is calculated

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

At this quantity the yearly ordering cost and the yearly holding cost are equal, and their sum is at its lowest.

Questions

What is holding cost?

What a unit costs you to keep for a year: storage, insurance, shrinkage and the return the cash could have earned elsewhere. A common estimate is 20–30% of the unit’s cost.

What if my supplier has a minimum order?

Order the larger of the two. EOQ assumes you can order any quantity, and supplier minimums or price breaks often outweigh it.

Does EOQ work for seasonal products?

Poorly, because it assumes steady demand. Use it for staples and plan seasonal stock separately.

If you run WooCommerce

StockPulse gives you the annual demand per WooCommerce product from real sales, so the EOQ is built on data rather than a guess. StockPulse is our plugin; the calculator above works the same whether you use it or not.

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