--- title: "EOQ Calculator: Economic Order Quantity Formula" description: "Free EOQ calculator: enter annual demand, order cost and holding cost to get the economic order quantity, orders per year, days between orders and total annual cost." canonical: "https://www.productmetrics.io/eoq-calculator" pageType: feature language: en publisher: "Product Metrics" dateModified: 2026-10-21 --- > Content index: https://www.productmetrics.io/llms.txt # EOQ calculator Find the economic order quantity (EOQ): the order size that keeps ordering cost and holding cost together as low as possible. Enter annual demand, the cost of placing an order and the cost of holding a unit for a year, in euros per unit or as a percentage of its cost. _EOQ is shown in whole units; costs use the unrounded value. Purchase cost is left out: it is the same at every order quantity when there are no quantity discounts. Demand is assumed steady through the year._ ## Every step behind the numbers, worked through for the start values. Illustrative data. An example product sells 10,000 units a year. Placing an order costs €50.00. Holding one unit for a year costs €4.00, which is 25% of its €16.00 unit cost. Economic order quantity worked through for the calculator’s start values: | Step | Calculation | Result | | --- | --- | --- | | EOQ | √(2 × 10,000 × €50.00 ÷ €4.00) | 500 units | | Orders per year | 10,000 ÷ 500 | 20 | | Days between orders | 365 ÷ 20 | 18.3 days | | Ordering cost per year | 20 × €50.00 | €1,000.00 | | Holding cost per year | 500 ÷ 2 × €4.00 | €1,000.00 | | Total annual cost | €1,000.00 + €1,000.00 | €2,000.00 | At the EOQ, ordering cost and holding cost are equal. Ordering 25% more at a time (625 units) costs €2,050.00 a year, 2.5% more. Ordering half as much (250 units) costs €2,500.00, 25% more. ## Cost around the optimum Total cost is lowest at the EOQ and rises slowly either side. Annual cost at order quantities around the EOQ: | Order quantity | Orders per year | Ordering cost | Holding cost | Total cost | | --- | --- | --- | --- | --- | | 250 units (50% of EOQ) | 40 | €2,000.00 | €500.00 | €2,500.00 | | 375 units (75% of EOQ) | 26.7 | €1,333.33 | €750.00 | €2,083.33 | | 500 units (EOQ) | 20 | €1,000.00 | €1,000.00 | €2,000.00 | | 625 units (125% of EOQ) | 16 | €800.00 | €1,250.00 | €2,050.00 | | 750 units (150% of EOQ) | 13.3 | €666.67 | €1,500.00 | €2,166.67 | | 1,000 units (200% of EOQ) | 10 | €500.00 | €2,000.00 | €2,500.00 | ## EOQ is a starting point, with assumptions to check. - **Steady demand.** EOQ assumes steady demand. This form uses annual demand and annual holding cost. Do not enter seasonal demand against annual holding cost; annualise demand for the period, and treat the result as an approximation. - **Cost per order.** Count only costs that come with each order whatever its size: admin, goods-in, freight per shipment. Costs per unit belong in the unit cost. - **Holding cost.** Include the cost of the money tied up in stock, storage, insurance and shrinkage, per unit per year. Enter it in euros, or as a percentage of the unit cost. - **Supplier terms.** EOQ ignores minimum order quantities, price breaks and pack sizes. Round to a practical quantity: the cost table shows a small step either side of the EOQ costs little. EOQ says how much to order. When to order is a separate question. Inventory Insights projects demand per product and works back from supplier lead time and a safety buffer to a reorder date, and warns you when that product’s reorder window opens. - [See how Inventory Insights works](https://www.productmetrics.io/inventory-insights) - [Reorder point explained](https://www.productmetrics.io/glossary/reorder-point) ## EOQ questions, answered. ### What is the EOQ formula? EOQ = √(2DS ÷ H), where D is annual demand, S the cost per order and H the holding cost per unit per year. With 10,000 units a year, €50.00 per order and €4.00 holding cost: √(2 × 10,000 × 50 ÷ 4) = √250,000 = 500 units. ### How do I work out the holding cost per unit? Add what it costs to keep one unit for a year: the money tied up in it, storage, insurance and shrinkage. Enter that in euros per unit, or choose the percentage option and enter a share of the unit cost: 25% of a €16.00 unit is €4.00 a year. ### What happens if I order more or less than the EOQ? Total cost rises on both sides, but slowly. At the start values the EOQ costs €2,000.00 a year. Ordering 625 units costs €2,050.00 (2.5% more) and 250 units costs €2,500.00 (25% more). ### How often should I order? Divide annual demand by the EOQ for orders per year (10,000 ÷ 500 = 20), then 365 by that for the days between orders (18.3). The reorder point tells you when to place each order. ### Does EOQ work for seasonal products or quantity discounts? Not directly. It assumes steady demand and one price per unit. This form needs annual demand and annual holding cost; do not mix seasonal demand with annual costs. With price breaks, compare total annual cost at each break, including purchase cost. ## Embed this calculator Paste this script tag into your own page to show the calculator there, with the same maths and no sign-up. It fits the width of your page, resizes with the calculator and follows the visitor’s light or dark setting. The script adds the calculator and a link to the full version under it. Keep the attribution link: it credits the calculator. `` ## Related pages. - [Reorder point calculator](https://www.productmetrics.io/reorder-point-calculator): When to place each order. - [Safety stock calculator](https://www.productmetrics.io/safety-stock-calculator): The buffer for demand and delivery above plan. - [Reorder point](https://www.productmetrics.io/glossary/reorder-point): Defined, with an example per product. - [Safety stock](https://www.productmetrics.io/glossary/safety-stock): The extra stock held against variation. - [Lead time](https://www.productmetrics.io/glossary/lead-time): The days between ordering and receiving stock. - [Days of inventory](https://www.productmetrics.io/glossary/days-of-inventory): How long your stock lasts at the current sales pace. - [Slow-moving inventory](https://www.productmetrics.io/glossary/slow-moving-inventory): What ordering too much at once can leave you with. - [Stockout](https://www.productmetrics.io/glossary/stockout): What too little stock costs you. - [Dead stock inventory](https://www.productmetrics.io/blog/dead-stock-inventory): When stock stops selling and what to do about it. - [Inventory Insights](https://www.productmetrics.io/inventory-insights): A reorder date per product, from demand, lead time and safety buffer. ## Know when to reorder every product, not only how much. Inventory Insights projects demand per product and works back from supplier lead time and a safety buffer to a reorder date, and warns you when that product’s reorder window opens. Stock cover also feeds the labels your campaigns use, so products you cannot deliver lose priority. - [See how Inventory Insights works](https://www.productmetrics.io/inventory-insights) - [Analyse your products for free](https://app.productmetrics.io/): Log in with Google, no credit card --- Published by Product Metrics (Berend Vrakking, founder). HTML version: https://www.productmetrics.io/eoq-calculator