EOQ Calculator Widget
Embed the classic economic order quantity model. Readers enter annual demand, the cost of placing an order and the holding cost - as an amount per unit or a percentage of unit cost - and see the EOQ, how often to order and the minimum annual cost, with a curve showing why ordering more or less costs extra.
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<iframe src="https://a2z.tools/embed/w/eoq-calculator" title="EOQ Calculator by A2Z Tools" width="100%" height="700" style="border:0;width:100%" loading="lazy" allow="clipboard-write"></iframe>
A plain iframe. Works everywhere, including site builders that strip scripts. Adjust height if your content needs more room.
<div data-a2z-widget="eoq-calculator" data-height="700"></div> <script async src="https://a2z.tools/embed.js"></script>
Adds a small script (what it does) that sizes the widget to fit its content, loads it lazily and keeps it isolated from your page's CSS.
Works with
How it works
Ford W. Harris showed in 1913 that ordering cost falls and carrying cost rises as the lot size grows, and that their sum is lowest where they are equal. That point is EOQ = sqrt(2DS/H), with D the annual demand in units, S the fixed cost per order or set-up, and H the cost of holding one unit for a year. Holding cost can be entered directly or as a rate on the unit cost: 20% a year on a 12.00 item is 2.40. With 12,000 units a year and 100 per order, EOQ is sqrt(2 x 12,000 x 100 / 2.40) = 1,000 units, giving 12 orders a year, one about every 30 days on a 365-day year, and an annual cost of 1,200 ordering plus 1,200 holding. The chart plots total and holding cost from a quarter of the EOQ to three times it; the flat bottom shows that a rounded pack size near the EOQ costs little extra.
Calculation method
- EOQ = sqrt(2 x D x S / H)
- D = annual demand (units); S = cost per order; H = holding cost per unit per year (or rate x unit cost)
- Orders per year = D / EOQ; time between orders = 365 x EOQ / D days
- Total relevant cost = (D / Q) x S + (Q / 2) x H, minimised at Q = EOQ where both terms are equal
Worked examples
Textbook example
Inputs: D 1,000 units; S 10; H 0.50 per unit per year
Result: EOQ 200 units; 5 orders a year; every 73 days; total cost 100
Ordering cost 5 x 10 = 50 equals holding cost 100 x 0.50 = 50.
Holding as a percentage
Inputs: D 12,000; S 100; holding 20% a year on a unit cost of 12
Result: EOQ 1,000 units; 12 orders a year; about 30.4 days apart; total cost 2,400
H = 0.20 x 12 = 2.40 per unit per year.
Limitations
- Assumes constant, known demand and instant replenishment in one delivery; no stockouts are allowed.
- Ignores quantity discounts, minimum order quantities and storage or budget limits.
- Does not set the reorder point or safety stock - pair it with the reorder point widget.
Where publishers use it
- Operations-research and supply chain coursework
- Small manufacturers deciding batch sizes for set-up-heavy parts
- Wholesale and import businesses planning container orders
- Procurement blogs explaining why bulk buying is not always cheaper
- Inventory software help pages documenting order-quantity suggestions
Questions
What goes into the cost per order?
Every cost that occurs once per order regardless of its size: purchasing staff time, approval, freight booking, receiving and inspection, invoice processing - or, for production, the machine set-up and first-off checks. A typical figure is 50-200 per purchase order.
What goes into the holding cost?
Capital tied up (your cost of money), storage space, insurance, shrinkage, obsolescence and handling. Annual holding rates of 20-30% of the item's value are common, so a 12.00 item costs about 2.40-3.60 a year to keep.
Why does the purchase price not appear?
Because in the basic model the price per unit is the same whatever the lot size, so it adds the same D x price to every option and does not move the optimum. With quantity discounts you compare total cost including price at each price break.
How sensitive is the answer?
Very little near the optimum. In the default case ordering 1,250 instead of 1,000 raises annual cost from 2,400 to 2,460, only 2.5%. That is why rounding to a pallet or carton multiple is fine.
Does EOQ work for production batches?
Yes, with set-up cost as S. If parts are produced gradually while being used, the economic production quantity adds a factor sqrt(p / (p - d)) for production rate p and usage rate d, which this widget does not apply.
Sources
- Inventory Management (DSIS 300 course notes) - University of Kentucky . States Q* = sqrt(2DS/H) and total cost = (Q/2) x H + (D/Q) x S. Checked 2026-10-01.
- Ford Whitman Harris's economical lot size model (D. Erlenkotter, International Journal of Production Economics 155, 2014) - University of California eScholarship (UCLA) . History of Harris's 1913 paper "How Many Parts to Make at Once", the origin of the square-root EOQ formula. Checked 2026-10-01.
Cite or recommend this tool
If you reference this tool in an article, course or documentation, these formats are ready to copy. They are optional - nothing is added to your site unless you paste it.
A2Z Tools EOQ Calculator https://a2z.tools/embed/eoq-calculator
<a href="https://a2z.tools/embed/eoq-calculator">A2Z Tools EOQ Calculator</a>
[A2Z Tools EOQ Calculator](https://a2z.tools/embed/eoq-calculator)
EOQ Calculator by A2Z Tools - https://a2z.tools/embed/eoq-calculator
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