LogoKALKULERO.
DE
← All Calculators•E-Commerce & Retail•EOQ Inventory

Economic Order Quantity (EOQ Calculator)

Calculate EOQ using the Andler formula to minimize inventory holding and ordering setup costs.

Disclaimer: All calculations and figures are provided for informational purposes only and without warranty. This does not constitute legal, tax, or financial advice. Liability for any decisions made based on this calculator is disclaimed.
Scenarios:

1. Annual Demand & Purchase Cost

Goods Value: $300,000.00/yr.
units
$/unit

2. Order Setup Cost & Holding Rate

$5.00 holding/unit/yr
$
%

3. Supplier Lead Time & Safety Stock

days
units

💡 Andler-Prinzip (EOQ): Am Kostenoptimum sind die jährlichen Lagerhaltungskosten exakt gleich hoch wie die jährlichen Bestellkosten. Zu große Bestellmengen binden unnötig Kapital und erzeugen hohe Lagerkosten; zu kleine Bestellungen verursachen explodierende Bestellabwicklungskosten.

Economic Order Quantity (EOQ)
465 units

Equals 25.8 orders per year (reordering every 14 days).

Reorder Point (ROP):484 units
Min. Inventory Costs:$2,324.00/yr.
Order Frequency:alle 14 days
Ordering Costs / yr$1,161.0025.8 orders/yr.
Holding Costs / yr$1,163.00Ø 233 units stock
Total Inventory Cost$2,324.00holding + order costs
Reorder Point (ROP)484trigger reorder

Inventory Economics: Mastering the Economic Order Quantity (EOQ) Formula

In retail, wholesale distribution, and manufacturing, optimizing order batch sizes using the Economic Order Quantity (EOQ) model is the mathematical cornerstone of capital efficiency. The model balances the trade-off between fixed administrative setup expenses and inventory carrying costs.

1. Core Inventory Optimization Equations

  • Economic Order Quantity (EOQ): √((2 × Annual Demand × Fixed Order Cost) / Annual Holding Cost per Unit)
  • Annual Holding Cost per Unit: Unit Purchase Price × (Holding Rate % / 100)
  • Optimal Annual Order Count: Annual Demand / Optimal Order Quantity
  • Reorder Point (ROP): (Daily Demand × Supplier Lead Time in Days) + Safety Stock Buffer

2. Actionable Playbooks for Supply Chain Leaders

Maximize cash flow by digitizing purchase orders to minimize fixed administrative processing overhead, dynamically calibrating safety stock buffers against historical supplier delivery variance, and reassessing holding cost rates in changing interest environments.

Frequently Asked Questions (FAQ)

What is the Economic Order Quantity (EOQ) formula?▼

The EOQ formula (Wilson/Andler inventory model) determines the ideal order quantity that minimizes the total annual costs of ordering setup and inventory holding: EOQ = √((2 × Annual Demand × Fixed Order Cost) / Annual Holding Cost per Unit).

What occurs at the cost-optimal point of the EOQ curve?▼

At the exact EOQ point, annual ordering costs perfectly equal annual inventory carrying costs. Ordering in larger batches increases inventory holding drag, while ordering in smaller batches results in runaway ordering and administrative expenses.

What factors comprise the Annual Inventory Holding Cost Rate?▼

Industry holding cost rates typically range between 15% and 25% annually, consisting of: cost of tied-up capital (interest rate), warehouse storage rent, utilities, insurance premiums, obsolescence, and product shrinkage.

What is the Reorder Point (ROP) and how is it calculated?▼

The Reorder Point establishes the inventory threshold that triggers a replenishment order to prevent stockouts before new goods arrive: Reorder Point = (Daily Demand × Supplier Lead Time in Days) + Safety Stock.

What are the core assumptions and constraints of classical EOQ?▼

Classical EOQ assumes steady consumer demand, constant unit purchase costs without tiered bulk discounts, and predictable lead times. In practice, supply chain managers adjust baseline EOQ for supplier Minimum Order Quantities (MOQs) and seasonal peaks.

How can businesses lower their EOQ to free up working capital?▼

The most effective method is automating the purchase order workflow (using EDI and modern ERP tools to compress fixed cost per order) and partnering with local suppliers to compress replenishment lead times.

More Calculators

Inventory & DSIInventory Turnover & DSI CalculatorCalculate Inventory Turnover Ratio, Days Sales of Inventory (DSI), and inventory carrying costs.Working CapitalWorking Capital & Current Ratio CalculatorCalculate Net Working Capital (NWC), Current Ratio, Quick Ratio (Acid-Test), and Cash Ratio liquidity.Break-EvenBreak-Even Point CalculatorCalculate unit contribution margins, break-even sales volume, minimum revenue, and target profit requirements.ReturnsE-Commerce Return Rate & Cost CalculatorCalculate true return rate costs, shipping freight, restocking labor, and inventory depreciation losses.