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Economic order quantity (EOQ)

Economic order quantity (EOQ): enter your own figures, see the result and calculation method, and check the model’s assumptions.

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Enter your values, then select Calculate.

How it works

EOQ = √(2 × annual demand × cost per order / annual holding cost per unit). Round up for a whole-unit planning quantity.

Input definitions

Annual demand (units)
Enter the value in the labeled unit.
Cost per order
Enter the value in the labeled unit.
Annual holding cost per unit
Enter the value in the labeled unit.

A worked example

Annual demand (units)
10000
Cost per order
25
Annual holding cost per unit
2
500

Assumptions & limits

Constant demand and lead time; no shortages, quantity discounts or capacity constraints. Holding cost is per unit per year, not a percentage.

Sources & review

Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.

Method updated 2026-10-17. Content checked against the stated method and examples. Our verification approach.

Common questions

Should holding cost be entered as a percentage?

No. Enter the annual currency cost of holding one unit. If you only have a carrying-cost percentage, first multiply the unit purchase cost by that percentage.

Are these investment and borrowing results guaranteed?

No. These are deterministic estimates from the inputs and stated method, not predicted returns or lending offers. Actual fees, tax, timing and contractual terms may differ.

Are tax, overhead and refunds included automatically?

Only the costs and rates explicitly entered or described in the formula are included. Use consistent currencies and periods, and check what your own accounting policy requires.

How does the Economic order quantity (EOQ) tool work?

EOQ = √(2 × annual demand × cost per order / annual holding cost per unit). Round up for a whole-unit planning quantity.

What are the assumptions and limits of Economic order quantity (EOQ)?

Constant demand and lead time; no shortages, quantity discounts or capacity constraints. Holding cost is per unit per year, not a percentage.

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