Economic order quantity (EOQ) calculator
Find the order size that costs least over a year — where the cost of placing orders meets the cost of holding the stock — and how often you'd reorder.
Free, no sign-up. Everything is worked out in your browser — nothing you type is sent anywhere.
How it's worked out
EOQ = √(2 × annual demand × cost per order ÷ holding cost per unit)The holding cost per unit is the unit cost × the holding rate. At EOQ, a year's ordering cost
(demand ÷ EOQ × cost per order) equals its holding cost (EOQ ÷ 2 × holding cost per unit),
and their total is the lowest it can be.
Questions
- What is the economic order quantity?
- The order size that makes a year of ordering and holding a product cheapest. Order small and often and you pay the cost of placing an order many times; order big and rarely and you pay to store, insure and finance the stock. EOQ is where the two are equal.
- What goes into the cost of placing an order?
- Everything that comes with each order regardless of its size: the time to raise and approve it, receiving and checking it in, a per-shipment freight minimum, bank fees on the payment.
- What holding cost should I use?
- A share of the unit cost a year: the cost of the cash tied up, warehouse space, insurance, shrinkage and obsolescence. 20–30% a year is a common estimate for physical goods.
- What if my supplier has a minimum order quantity?
- Order the larger of the EOQ and the MOQ. Above EOQ the total cost curve is shallow, so an MOQ a little over it costs little — one far over it is cash tied up on the shelf.
Buy in the quantities that make sense
Raise purchase orders in Manifold from your suppliers, in their currency, receive exactly what arrives across as many deliveries as it takes, and close short what will never come.
More free tools
- Landed cost calculator — Spread freight, duty and fees over a PO by value, units or weight — every line's landed unit cost, to the cent.
- Reorder point and safety stock calculator — When to reorder: lead-time demand plus safety stock for the service level you want, and the cost of running out.
- Inventory turnover and days of inventory calculator — Turns, days of inventory, and the cash a faster turn frees.
- Kit and bundle profit calculator — A bundle's margin against its parts sold separately, and how many kits your stock builds.
- Product pricing and margin calculator — Price to a target margin after fees — retail, wholesale and quantity breaks, with break-even.
- Free shipping threshold and DIM weight calculator — A free-shipping threshold that pays for itself, and what a box costs by dimensional weight.
- Return and refund cost calculator — Both parcels, the fee you don't get back, handling and write-offs: a return's real cost.
- Wholesale vs direct-to-consumer calculator — Wholesale and direct side by side, with each channel's true CAC beside the blended one.
- Profit and loss builder — A month's P&L for a product business, on accrual or cash basis.
- What Manifold costs — Your month on Manifold's one plan, band by band, at your order volume.