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Economic Order Quantity (EOQ) Calculator

EOQ = √(2 × annual demand × order cost ÷ holding cost per unit). The sweet spot between ordering too often and holding too much.

Calculator
Result
EOQ 849 units
Economic Order Quantity849 units
Orders per year8.8
Days between orders41 days

Order cost includes transport and admin to place an order. Holding cost includes capital, space and obsolescence.

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When EOQ helps and when it does not

EOQ works best with stable demand and consistent supplier pricing. For volatile SKUs, use a min-max policy or service-level target instead.

Pair EOQ with the reorder point: EOQ tells you HOW MUCH, ROP tells you WHEN.

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Worked examples

7,500 units/yr, 1,200/order, 25 holding
  • EOQ ≈ 848 units · ~9 orders/yr · ~41 days apart

Frequently asked questions

Why a square root?
Ordering cost falls with bigger orders; holding cost rises. The crossover is at √.
What is included in order cost?
Transport, supplier processing, receiving labour, payment fees.
How do I compute holding cost?
Cost of capital + storage + shrinkage + obsolescence, applied per unit per year.
Should every SKU use EOQ?
No. Use it on stable, high-volume SKUs. ABC analysis tells you which.
Does Veira compute EOQ?
Yes, per SKU using your real demand history.

Doing this by hand every time? Veira runs the same calculation automatically on every sale, no spreadsheet required.

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