Does EOQ tell me when to reorder?

No. It sizes the replenishment lot. Use demand during lead time and safety stock to set the reorder point, and compare that trigger with inventory position.

What belongs in the cost per order?

Include expenses caused by placing another order, such as receiving labor and fixed freight charges. Exclude purchase price and overhead that will remain unchanged.

Why does the answer contain fractional units?

The square-root model treats order quantity as continuous. Evaluate nearby feasible whole quantities or pack multiples before selecting the purchase lot; the displayed decimal is not a purchase instruction.

Can I use it with supplier price breaks?

Not directly. A price break changes annual purchase cost and holding cost. Compare total purchase, ordering and holding costs at each eligible price tier.

Supply Chain & Procurement calculator

Economic Order Quantity Calculator

Find the replenishment quantity that minimizes annual ordering and cycle-stock holding costs. Enter demand, incremental costs and your current purchase lot to compare the two policies.

What this calculator does

Find the purchase lot that minimizes annual ordering and holding costs, and compare it with your current lot.

Formula used

Annual holding cost per unit H = unit cost × annual carrying rate ÷ 100
Economic order quantity Q* = √(2 × annual demand × cost per order ÷ H)
Annual relevant cost C(Q) = annual demand × cost per order ÷ Q + H × Q ÷ 2
Potential savings = C(current quantity) − C(Q*)
Orders per year = annual demand ÷ Q*; average cycle stock = Q* ÷ 2

Inputs explained

Annual Demand: Annual usage forecast for one item.
Cost per Order: Incremental purchasing, receiving and fixed delivery costs per replenishment.
Unit Purchase Cost: Supplier price, constant across the order sizes compared.
Annual Carrying Rate: Annual incremental holding costs as a percentage of inventory value.
Current Order Quantity: Current replenishment lot from purchase order records.

How to use the result

Best suited to setting replenishment lot sizes, reviewing large purchase batches.
EOQ is continuous; compare feasible pack sizes and minimum orders before buying. Quantity discounts, perishability, storage limits and production replenishment rates require separate models.

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).
USITC reported an average effective tariff statistic — a calculated-duty rate of 12.4% of covered customs value in 2025 across the 57 manufacturing import families MFG Calcs tracks, up from 3.3% the year before. This is a statistical aggregate, not verified cash paid or an entry-specific legal rate. Statutory and effective rates by family are at mfgcalcs.com/tariffs.
Sourcing currencies as of 2026-10-02 (Federal Reserve H.10): 6.7038 CNY and 18.192 MXN per USD. Landed-cost comparisons move with these daily rates.

Common questions

Does EOQ tell me when to reorder? No. It sizes the replenishment lot. Use demand during lead time and safety stock to set the reorder point, and compare that trigger with inventory position.
What belongs in the cost per order? Include expenses caused by placing another order, such as receiving labor and fixed freight charges. Exclude purchase price and overhead that will remain unchanged.
Why does the answer contain fractional units? The square-root model treats order quantity as continuous. Evaluate nearby feasible whole quantities or pack multiples before selecting the purchase lot; the displayed decimal is not a purchase instruction.
Can I use it with supplier price breaks? Not directly. A price break changes annual purchase cost and holding cost. Compare total purchase, ordering and holding costs at each eligible price tier.

Last reviewed 2026-10-12.