EOQ Calculator
The economic order quantity balances ordering and holding costs: with annual demand of 1200, an ordering cost of 50 and a holding cost of 2, EOQ = 244.949 units.
244.948974278318 units
Full answer, then cut to fewer decimals (not rounded):
- 244.948974278318 units
- 244.94897427831 units
- 244.9489742783 units
- 244.948974278 units
- 244.94897427 units
- 244.9489742 units
- 244.948974 units
- 244.94897 units
- 244.9489 units
- 244.948 units
- 244.94 units
- 244.9 units
- Orders per year D/Q
- 4.89898
- Average cycle stock Q/2
- 122.474 units
- Annual ordering cost (D/Q)S
- 244.95
- Annual holding cost (Q/2)H
- 244.95
- Total annual cost
- 489.90
- Reorder point
- 43.0137 units
Step-by-step solution
- EOQ = √(2DS ÷ H) = √(2 × 1200 × 50.00 ÷ 2.00) = 244.949 units
- Daily demand = 1200 ÷ 365 = 3.28767 units/day
- Reorder point = daily demand × lead time + safety stock = 3.28767 × 7 + 20 = 43.0137 units
EOQ Formula
EOQ = √(2 D S ÷ H)
D annual demand, S cost per order, H holding cost per unit per year
Worked Example
Annual demand of 1200 units, 50 per order and a holding cost of 2 per unit per year:
- EOQ = √(2DS ÷ H) = √(2 × 1200 × 50.00 ÷ 2.00) = 244.949 units
- Daily demand = 1200 ÷ 365 = 3.28767 units/day
- Reorder point = daily demand × lead time + safety stock = 3.28767 × 7 + 20 = 43.0137 units
Average cycle stock Q/2: 122.474 units · Annual ordering cost (D/Q)S: 244.95 · Annual holding cost (Q/2)H: 244.95 · Total annual cost: 489.90 · Reorder point: 43.0137 units
Frequently asked questions
Why is EOQ where ordering cost equals holding cost?
Total cost = (D/Q)S + (Q/2)H. Its minimum is where the derivative is zero, which gives Q = √(2DS/H); at that point both cost terms are equal.
How do I calculate the reorder point?
Reorder point = average daily demand × lead time (days) + safety stock. With 1200 a year, 7 days’ lead time and 20 units of safety stock it is about 43 units.
What are the assumptions of the EOQ model?
Constant, known demand; fixed ordering and holding costs; instant replenishment of the full order; no stock-outs or quantity discounts.
Sources
Last reviewed: . Factors are stored exactly and computed with 50-digit decimal arithmetic. See how we verify conversion factors.
Cite this page
APA
Scientific Converters. (2026, October 15). EOQ Calculator. Retrieved October 25, 2026, from https://scientificconverters.com/calculators/eoq-calculator/
IEEE
Scientific Converters, "EOQ Calculator," scientificconverters.com. Accessed: Oct. 25, 2026. [Online]. Available: https://scientificconverters.com/calculators/eoq-calculator/