Free EOQ Calculator Online
Economic Order Quantity for minimum inventory costs with reorder point
The EOQ Calculator finds the ideal order quantity that minimises the combined cost of ordering and holding inventory, using the Wilson EOQ formula. Supply chain managers, procurement teams, and small business owners use it to eliminate both the excess cost of over-ordering and the stockout risk of under-ordering.
Frequently Asked Questions
About the EOQ Calculator
The Economic Order Quantity model, developed by Ford W. Harris in 1913, solves a classic trade-off in inventory management: ordering large quantities reduces per-order costs but increases storage costs; ordering small quantities does the opposite. The EOQ is the mathematically optimal point where total costs are minimised.
The formula requires three inputs: annual demand (units sold per year), the fixed cost of placing one order (administrative, shipping, and receiving costs), and the annual holding cost per unit (storage, insurance, capital tied up, and obsolescence risk). The square root relationship means that doubling demand increases the optimal order size by only about 40%, not 100%.
The calculator also computes your reorder point based on supplier lead time, so you know exactly when to place the next order to avoid stockouts.
Formula Used
EOQ = √(2 × Demand × Order Cost / Holding Cost per Unit)
When Should You Use This?
The EOQ Calculator is ideally suited for entrepreneurs, managers, accountants, and business analysts who need to perform quick, accurate calculations related to general calculations. Use this tool when you need to verify figures, compare different scenarios, or get a precise answer without manual computation errors.
What Does The Result Mean?
The calculated output provides an instant, accurate resolution to your input parameters. You can use these results directly for your planning, assignments, or professional tasks, knowing they are based on standardized formulas.
Example Calculation
Finding the EOQ for a product with 1,200 units annual demand
📥 Inputs
- Annual demand: 1,200 units
- Order cost (per order): $35
- Annual holding cost per unit: $4
🔢 Calculation Steps
- 1EOQ = √(2 × D × S / H)
- 2EOQ = √(2 × 1,200 × 35 / 4)
- 3EOQ = √(84,000 / 4)
- 4EOQ = √21,000 = 144.9 ≈ 145 units per order
- 5Number of orders per year: 1,200 ÷ 145 = 8.3 orders
- 6Reorder point (assuming 7-day lead time): (1,200 ÷ 365) × 7 = 23 units
Limitations of this Calculator
- Results are based purely on the mathematical relationship of the inputs provided.
- Does not account for edge cases or extreme outlier values that fall outside standard formula constraints.
- Calculated outputs should be double-checked against your specific real-world requirements before finalizing important decisions.
How to Use the EOQ Calculator
- 1Enter your values into the EOQ Calculator input fields above.
- 2Review the input labels to ensure you are using the correct units.
- 3Click the "Calculate" button to get your instant result.
- 4Use the step-by-step breakdown to understand how the result was calculated.
- 5Export or copy your result to use in reports or share with others.
Tips & Best Practices
- Double-check your input units before calculating — using the wrong unit is the most common source of errors.
- Bookmark this EOQ Calculator for quick access next time you need it.
- Use the share button to send your results to a colleague or save them for later reference.
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⚠️ Business Disclaimer: Results are projections based on your inputs and may not reflect actual business outcomes. Consult a business advisor or accountant before making financial or operational decisions.