EOQ Calculator
Find the order quantity that minimises your total inventory cost — the classic Economic Order Quantity. Free, instant and fully in your browser, using the standard Wilson EOQ formula.
Economic Order Quantity
632
units per order
EOQ = √( (2 × D × S) / H )
At the EOQ, annual ordering cost equals annual holding cost — that balance is what minimises total cost. Total cost excludes the purchase price of the goods.
What is Economic Order Quantity?
Economic Order Quantity (EOQ) is the order size that minimises the combined cost of ordering and holding inventory. Order too often and ordering costs pile up; order too much at once and holding costs balloon. EOQ finds the sweet spot where the two are equal. It is a cornerstone of inventory management and a useful lean signal: large EOQs often point to high setup or ordering costs worth attacking with SMED.
How to calculate EOQ
- 1
Estimate annual demand
Take the total units you expect to consume or sell over a year (D).
- 2
Find your cost drivers
Cost per order (S) is the fixed cost to place and receive an order; holding cost (H) is the cost to keep one unit in stock for a year.
- 3
Read the EOQ
EOQ = the square root of (2 × D × S / H). Order in that quantity to minimise total annual ordering-plus-holding cost.
Frequently asked questions
What does EOQ assume?
The classic EOQ model assumes steady demand, a constant cost per order and a constant holding cost per unit, with no quantity discounts or stockouts. It is a strong starting point; adjust for variability, discounts and lead time in practice.
How does EOQ connect to lean and SMED?
A large EOQ is usually driven by a high cost per order or setup. Reducing changeover and ordering cost — for example with SMED — shrinks the economic batch size and enables smaller, more frequent lots, which is core to lean flow.
How does Yamazo Studio help?
Yamazo Studio analyses setup and changeover work from shop-floor video (SMED), helping you cut the setup cost that inflates batch sizes — so smaller lots become economic.
Related lean & inventory tools
Smaller batches start with faster setups
EOQ shrinks when setup cost falls. Yamazo Studio turns changeover video into SMED analysis and standard work that make small lots economic — one offline Lean Operating Desk.
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