# EOQ calculator: economic order quantity | WebKoding

Annual demand, cost per order and holding cost in; the order size that minimises total inventory cost, and how often to order.

Source: https://webkodingtheme.com/tools/eoq-calculator/

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Free tool

# 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.

Annual demand (units) Cost per order (USD) Shipping, handling and admin for one purchase order. Holding cost per unit (USD) (per year) Currency USD EUR GBP CAD AUD TRY INR AED SAR
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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