What this calculator does
EOQ applies √(2DS ÷ H), where D is annual demand, S ordering cost, and H annual holding cost per unit. It finds a cost trade-off quantity, not a service guarantee.
When to use it
Use it for recurring, relatively predictable consumables or repair parts with meaningful procurement and carrying costs.
Inputs and formula
Annual demand and holding cost must use the same item and year. Ordering cost should include the internal purchasing effort that changes with order frequency.
Worked example and interpretation
1,200 units of demand, $75 per order, and $12 annual holding cost produce an EOQ of about 122 units per order.
Practical notes and limitations
Minimum order quantities, shelf life, quantity discounts, intermittent demand, and criticality can dominate the mathematical optimum.