Free EOQ Calculator
Work out your economic order quantity in seconds. Find the order size that keeps ordering and holding costs at their lowest combined total, and see orders per year, the order cycle, the reorder point and a cost curve.
Units sold or used in a year.
Admin, shipping and handling per order.
Price you pay for one unit.
Carrying cost as a share of unit price. That is ₹10.00 a unit.
Days from order to delivery, for the reorder point.
Order this many each time to keep total inventory cost lowest.
- Holding cost per unit / year
- ₹10.00
- Annual ordering cost
- ₹9,487
- Annual holding cost
- ₹9,487
- Average inventory
- 949 units
- Purchase cost (units × price)
- ₹6,00,000
- Total cost incl. purchases
- ₹6,18,974
- Daily demand
- 32.9 units
- Reorder point
- 230 units
At the EOQ, your annual ordering cost and holding cost are equal, and their total is as low as it gets. That crossover is the dip in the total cost curve above.
A quick, reliable guide for setting order sizes. Confirm against your real demand and supplier terms before you commit to an order.
Your EOQ in four steps.
Enter your demand and costs, and the tool works out the order size with the lowest total cost, then shows how often to order and when to reorder. Everything updates as you type.
Enter your demand
Add how many units you sell or use in a year. This is your annual demand, the D in the formula.
Add your costs
Enter what it costs to place one order, and the cost to hold one unit in stock for a year, either as an amount or a percentage of the unit price.
Read your EOQ
See the order quantity that keeps ordering and holding costs at their lowest combined total, with orders per year, the order cycle and your reorder point.
Plan your orders
Use the cost curve and the full breakdown to set your order size, then copy the summary for your notes or your team.
Order the right amount, at the right time.
Order too often and ordering costs pile up. Order too much and cash and space are tied up in stock. EOQ finds the balance, and the reorder point tells you when to act.
Order the right amount
EOQ is the sweet spot between ordering too often, which racks up ordering costs, and ordering too much, which ties up cash and warehouse space.
Order at the right time
Add your lead time and the tool works out the reorder point, the stock level at which you should place the next order so you do not run out.
Spend the least on inventory
See your lowest possible total of ordering and holding costs for the year, and watch the cost curve show exactly where that minimum sits.
How the EOQ formula works.
The formulas behind the tool, with a worked example. D is annual demand, S is the cost per order, and H is the holding cost per unit per year.
Economic order quantity
EOQ = √(2 × D × S ÷ H)
Example: With demand of 12,000 units a year, ₹1,500 to place an order and ₹10 to hold a unit for a year, EOQ is about 1,897 units.
Orders per year and cycle
Orders = D ÷ EOQ
Cycle = 365 ÷ Orders
Example: 12,000 ÷ 1,897 is about 6.3 orders a year, so roughly one order every 58 days.
Total inventory cost
Total = (D ÷ EOQ) × S + (EOQ ÷ 2) × H
Example: At the EOQ, ordering cost and holding cost are equal. Here each is about ₹9,487, for a total of about ₹18,974 a year.
Reorder point
Reorder point = (D ÷ 365) × Lead time
Example: At 12,000 units a year and a 7 day lead time, you reorder once stock falls to about 230 units.
Inventory that reorders itself.
EOQ on one item is a great start. Across a whole catalogue, with changing demand, supplier discounts, safety stock and reorder points, you want a system that tracks stock in real time and raises orders at the right moment. That is the kind of inventory, ERP and procurement software we build at Techliphant, shaped around how your business actually works.
Costing an order? Try the discount calculator.
Common EOQ questions.
EOQ is the order quantity that keeps your total inventory cost as low as possible. It balances two costs that pull in opposite directions: the cost of placing orders, which falls when you order in bigger batches, and the cost of holding stock, which rises when you order more at once. The EOQ is the order size where the combined total of these two is at its minimum.
The classic Wilson formula is EOQ = √(2DS ÷ H), where D is annual demand in units, S is the cost to place one order, and H is the cost to hold one unit in stock for a year. You take two times demand times the ordering cost, divide by the holding cost per unit, and take the square root.
Say you sell 12,000 units a year, it costs ₹1,500 to place an order, and it costs ₹10 to hold one unit for a year. EOQ = √(2 × 12,000 × 1,500 ÷ 10) = √3,600,000, which is about 1,897 units. So ordering roughly 1,897 units at a time keeps your total ordering and holding cost lowest.
Ordering cost is what it takes to place and receive one order, such as admin time, shipping, handling and inspection. Holding cost, also called carrying cost, is what it costs to keep one unit in stock for a year, including storage, insurance, spoilage, obsolescence and the money tied up in that stock. EOQ trades these two off against each other.
You can enter it directly as an amount per unit per year, or as a percentage of the unit cost. Carrying cost is often estimated at 20 to 30 percent of the value of the item. So a unit that costs ₹50 with a 20 percent carrying rate has a holding cost of ₹10 a year. This calculator lets you use either method.
Order in small, frequent batches and you place many orders, so ordering cost is high but you hold little stock. Order in large batches and ordering cost is low but you hold a lot of stock, so holding cost is high. The EOQ is the point where these two costs are exactly equal, and that is where their sum is lowest. The cost curve in the tool shows this crossover clearly.
EOQ tells you how much to order. The reorder point tells you when to order. It is the stock level at which you place your next order, worked out as your daily demand multiplied by the lead time in days. Add a lead time in the calculator and it shows your reorder point alongside the EOQ.
The EOQ model assumes demand is steady and known, ordering and holding costs are constant, the whole order arrives at once, and there are no bulk discounts. Real demand is lumpier than that, so treat EOQ as a strong starting point rather than an exact rule. It is still a very useful guide for setting order sizes and spotting when you are ordering too often or too much.
The basic EOQ formula does not. If a supplier offers a lower unit price for larger orders, the best order size can be bigger than the plain EOQ, because the saving on unit cost outweighs the extra holding cost. In that case, compare the total cost at the EOQ with the total cost at each discount break. Proper inventory software does this for you automatically.
Safety stock is extra buffer stock you keep to cover unexpected demand or supplier delays. The basic reorder point here assumes a steady lead time and does not add safety stock. If you keep a buffer, add it to the reorder point so you place the order a little earlier.
Yes on both. It is free, there is no sign-up, and it runs entirely in your browser. Nothing you type is sent anywhere or saved, so your figures stay on your own device.
It is great for a quick check on a single item or a one-off decision. If you are managing many products, changing demand, supplier discounts, safety stock and reorder points across a whole catalogue, you want inventory or ERP software that tracks it all and reorders on time. That is the kind of system we build at Techliphant, shaped around how your business actually works.
Private by design: this calculator runs entirely in your browser, so nothing you type is uploaded or stored. It is provided free for quick estimates and educational use. EOQ assumes steady demand and constant costs, so treat it as a strong guide and confirm against your real figures before you order.
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