Economic Order Quantity and Inventory Cost Calculator

How to calculate

Use the continuous EOQ formula, then compare the feasible pack multiples on either side and the rounded minimum order. Include entered safety-stock holding cost, and derive a reorder threshold from constant daily demand and lead time.

EOQ=sqrt(2×annual demand×cost per order/annual holding cost per unit); annual cost=D×S/Q+H×(Q/2+safety stock)

Worked example

For demand 10000/year, order cost 50 and holding cost 2/unit/year, continuous EOQ≈707.107. In packs of 100, choose 700 units. With safety stock 100, annual ordering plus holding cost≈1614.286; reorder at 300 units for five lead days and 250 operating days/year.

Assumptions and input details

Deterministic constant-demand EOQ with instantaneous batch replenishment, no planned shortages, no quantity discounts and no capacity constraint beyond entered minimum/multiple. Ordering and holding costs must be positive. The chosen quantity minimizes this model on feasible pack multiples; it is not a purchase instruction. Safety stock is entered, not statistically sized. Annual cost excludes purchase cost, taxes and other omitted costs. Fractional orders/year and cycle days are long-run averages, not a dated annual order schedule. Lead time uses the same operating-day basis as demand.

References: MIT: deterministic inventory and EOQ · NC State University: EOQ cost model