Why is this batch larger than the EOQ formula gives?

Because demand draws stock down while the batch runs, so average stock is lower and a bigger batch pays. At 96 units a day against 600 made, the batch rises from 2,921 to 3,187.

What does running off the economic batch cost?

Less than you might expect, because total cost is flat near its minimum. Here, 5,000 units instead of 3,187 adds $497 a year, about 10%. Half or double the economic batch adds 25%.

What belongs in setup cost per run?

Setter labor, first-piece and adjustment scrap, and consumables used per changeover. Add the value of lost output only when the machine is the bottleneck.

What if the production rate is close to demand?

The batch grows quickly, because stock builds slowly during the run. At 150 a day against 96 demanded, the batch is 4,869 and the run lasts 32 days.

Planning calculator

Batch Size Calculator

Set a standard run quantity that balances changeover cost against the cost of holding finished stock, which is drawn down while the run continues. You need demand, setup and holding cost, daily output and your current batch.

What this calculator does

Run quantity that minimizes setup plus holding cost, and what your current batch costs.

Formula used

Daily demand = annual demand ÷ working days; x = daily demand ÷ production rate
Economic batch Q* = √(2 × annual demand × setup cost ÷ (holding cost × (1 − x))); peak inventory = Q* × (1 − x)
Runs per year = annual demand ÷ Q*; days between runs = Q* ÷ daily demand; run length = Q* ÷ production rate
Annual cost at batch Q = setup cost × annual demand ÷ Q + holding cost × Q × (1 − x) ÷ 2
Extra cost of current batch = annual cost at current batch − annual cost at Q*

Inputs explained

Annual Demand: Forecast or trailing 12 months of usage.
Setup Cost per Run: Setter labor, first-piece scrap and consumables per changeover.
Annual Holding Cost per Unit: Unit cost × annual carrying rate.
Working Days per Year: Days the part is consumed each year.
Production Rate: Output per working day while this part runs.
Current Batch Size: Units run per setup on the current schedule.

How to use the result

Best suited to setting standard run quantities on a shared machine, pricing a SMED project by its batch reduction.
Sizes each part on its own; on a shared machine, check that all parts' runs and setups fit its hours. A batch released all at once, such as a heat-treat lot, follows the EOQ: enter a very high production rate. Does not check shelf life, storage space, pack multiples or minimum order quantities.

Current U.S. benchmarks

U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Common questions

Why is this batch larger than the EOQ formula gives? Because demand draws stock down while the batch runs, so average stock is lower and a bigger batch pays. At 96 units a day against 600 made, the batch rises from 2,921 to 3,187.
What does running off the economic batch cost? Less than you might expect, because total cost is flat near its minimum. Here, 5,000 units instead of 3,187 adds $497 a year, about 10%. Half or double the economic batch adds 25%.
What belongs in setup cost per run? Setter labor, first-piece and adjustment scrap, and consumables used per changeover. Add the value of lost output only when the machine is the bottleneck.
What if the production rate is close to demand? The batch grows quickly, because stock builds slowly during the run. At 150 a day against 96 demanded, the batch is 4,869 and the run lasts 32 days.

Related guides

Last reviewed 2026-10-01.