ClarityHow to use this tool
- Enter annual unit demand, cost per order, annual holding cost per unit.
- Select Calculate to view the result.
- Check the method and assumptions below before using the result.
Input reference and sample values
Use the units and choices shown for each field. Sample values are provided for practice, not as recommendations.
| Input | Format and units | Sample |
|---|---|---|
| Annual unit demand | Numeric value. Unit: units/year. Must be greater than zero. | 10000 |
| Cost per order | Numeric value. Unit: money/order. Must be greater than zero. | 50 |
| Annual holding cost per unit | Numeric value. Unit: money/unit/year. Must be greater than zero. | 2 |
Result for these sample inputs
707.106781 units
Select Try the example in the form to load these values and calculate them again. This replaces the current form inputs. Compare the result with the method and worked explanation below.
The method, explained
EOQ = √(2 × annual demand × order cost/annual holding cost per unit).
Using annual unit demand = 10000 units/year, cost per order = 50 money/order, annual holding cost per unit = 2 money/unit/year, the result is 707.106781 units. Change these example inputs to match your task; use the method above to check each step.
What to keep in mind
Assumes steady known demand, instantaneous replenishment and no quantity discounts. Use consistent currencies, reporting periods and accounting definitions. This arithmetic estimate excludes items not entered in the form.
Methodology maintained by ClarityKit. How these tools are built and checked.