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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 quantity1,732.1

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.

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