Procurement tools
Economic order quantity calculator
Order too little and you pay for ordering too often. Order too much and holding cost eats the savings. EOQ finds the quantity where both costs balance.
Formula
EOQ = √(2 × D × S ÷ H)
Inputs
Annual demand (D)
Units required per year
Ordering cost per order (S)
Admin, processing and receiving cost per PO
₹
Holding cost per unit / year (H)
Capital, storage & obsolescence per unit
₹
Economic order quantity
0 units
Orders per year–
Order cycle–
Total annual cost–
Cost curve — order quantity vs. cost
At the EOQ point, annual ordering cost and annual holding cost are equal — that’s what the curve below shows: as order quantity rises, ordering cost falls but holding cost rises, and the total cost curve bottoms out exactly at EOQ. Round to a practical order quantity (case pack, pallet, MOQ) rather than the exact decimal; the total cost curve is flat near the minimum, so small rounding barely moves your cost.
Frequently asked questions
What is Economic Order Quantity (EOQ)?
The order size that minimises the combined cost of ordering and holding inventory, based on the Wilson formula: the square root of (2 × annual demand × ordering cost, divided by holding cost per unit).
What counts as ordering cost?
Everything tied to placing and receiving a purchase order that doesn’t scale with volume — processing time, supplier communication, receiving and inspection.
What counts as holding cost?
The annual cost of keeping one unit in stock — capital tied up, storage space, insurance, obsolescence and shrinkage, per unit per year.
Is this EOQ calculator free to use?
Yes. It runs entirely in your browser, needs no account, and nothing you enter is stored or transmitted.