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What order size balances ordering and holding costs?
Calculate an unconstrained EOQ and compare it with your current lot size.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Annual units demanded
- 50,000 units
- Cost / purchase order
- $150
- Unit inventory cost
- $20
- Annual holding rate
- 25 %
- Current order quantity
- 5,000 units
Unconstrained economic order quantity
Example result only, not a forecast or promise.
- Annual relevant-cost reduction vs current
- $5,340
- Orders / year at EOQ
- 28.9
- Average cycle-stock cash at EOQ
- $17,321
What to do with this result
Round to feasible pack and supplier quantities, then test lead-time and stockout constraints; the formula assumes steady demand and no quantity discounts.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
EOQ = sqrt(2 × annual demand × order cost / annual holding cost per unit). Relevant cost = demand / quantity × order cost + quantity / 2 × holding cost per unit.
Assumptions and limitations
- Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
- Demand, lead times and service levels are scenario inputs. Validate variability, physical constraints and supplier terms before ordering.