Compute the Wilson economic order quantity √(2DS/H) and how many orders that implies per year.
| EOQ | – |
| Orders / year | – |
Use this EOQ calculator for the classic lot-size trade-off: ordering cost versus holding cost, with steady demand and no quantity discounts.
EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit per year). Orders per year = demand ÷ EOQ. Demand and holding cost must share a year. Holding cost is currency per unit per year, not a percent of value.
Annual demand: Units used or sold in a year.
Cost / order: Fixed cost of placing one order (not the purchase price of the goods).
Hold cost / unit / year: Cost of carrying one unit for a year.
EOQ: Units per order at the cost-minimising lot size.
Orders / year: How many such orders you place in a year.
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