EOQ Calculator (Economic Order Quantity)

Written by Great Medico

Updated September 25, 2026 •2 min read

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A financial result is only as useful as the inputs behind it. EOQ Calculator (Economic Order Quantity) estimates an economic order quantity from annual demand, cost per order, and annual holding cost per unit, so you can test the scenario with numbers that match your own situation.

What this calculator does

EOQ Calculator (Economic Order Quantity) estimates an economic order quantity from annual demand, cost per order, and annual holding cost per unit. The visible form contains Annual demand, Ordering cost per order, Annual holding cost per unit. These are the inputs that define this calculator’s scope. If a value, rule, or adjustment is not represented by a working field, it should not be assumed to be included in the result.

How to use it

Enter Annual demand, Ordering cost per order and Annual holding cost per unit. Keep monetary inputs in the same currency, or use the currency selector when one is provided. Before calculating, recheck Annual demand and the other values that materially affect the result. For a clean comparison, hold the other inputs constant while changing one assumption at a time so you can see what is driving the result.

How the calculation works

EOQ = √(2DS/H), where D is annual demand, S is ordering cost per order, and H is annual holding cost per unit. This is the calculation method that should anchor any manual check of the output. If a displayed field does not affect the current calculation, that limitation is stated below rather than silently treating the field as part of the formula.

Example

With the displayed example values (Annual demand = 10,000, Ordering cost per order = 50, and Annual holding cost per unit = 2) and the remaining defaults unchanged, the current calculator returns 707 for economic order quantity. Replacing those defaults with your own values recalculates the same relationship; change one input at a time if you want to see which assumption is driving the difference.

How to interpret the result

EOQ balances modeled ordering and holding costs. Higher demand or ordering cost raises EOQ; higher holding cost lowers it. Compare results produced from the same definitions and time period. A mathematically larger or smaller number is not automatically better unless the financial context makes that direction meaningful.

Limitations and notes

The classic EOQ model assumes steady demand, constant lead time, immediate replenishment, no stockouts, and stable per-unit costs. Quantity discounts, safety stock, capacity, and demand uncertainty are not included. Where the calculator depends on estimates, rates, accounting classifications, or future behavior, test more than one plausible scenario before making a decision.