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Economic order quantity

Estimate an order size balancing ordering and holding costs.

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Your result

How this works

Estimate an order size balancing ordering and holding costs.

Formula

EOQ = square root of (2 × annual demand × order cost ÷ annual holding cost per unit).

Assumptions and limits

Classic EOQ assumes steady demand, instant replenishment and no quantity discounts. Rounded order size is illustrative.

Worked example

Replace the example with your own figures, then compare scenarios. Include all relevant costs and use records from matching periods.