Annual ordering, holding, and total cost at several order quantities relative to your EOQ, using the demand, costs, and unit price you entered. Total cost is lowest at the EOQ. Same formulas as the calculator.
Order quantity
Orders / year
Ordering cost
Holding cost
Total cost
50% of EOQ (224)
44.7
$2,236
$559
$2,795
75% of EOQ (335)
29.8
$1,491
$839
$2,329
EOQ (optimal) (447)
22.4
$1,118
$1,118
$2,236
150% of EOQ (671)
14.9
$745
$1,677
$2,422
200% of EOQ (894)
11.2
$559
$2,236
$2,795
Estimates only — not financial, tax, or professional advice.
100% private — every number you enter is calculated in your browser and never sent to our servers.
What it calculates: Economic Order Quantity, Orders Per Year, Total Inventory Cost, Average Inventory (Units).
Updated 5 June 2026 · Transparent assumptions
The minimum sits where they cross
Ordering cost is incurred per order, so it falls as orders get larger and less frequent. Holding cost is incurred per unit held, so it rises with order size because average inventory is half the order quantity. Total cost is the sum, and it is a curve with a minimum.
At the optimum the two costs are equal, which is a useful check on any EOQ figure: compute both at the recommended quantity and they should match. If they do not, one of the inputs is not what it seems.
Being 20% off the optimum costs about 2% in total cost
The total cost curve is shallow around its minimum, so ordering somewhat more or less than the exact EOQ costs very little. Ordering 20% above or below the optimum raises total cost by roughly 2%.
That insensitivity is what makes EOQ practical despite inputs that are always estimates. It also means rounding to a case, pallet or truckload quantity is nearly free, and usually worth more in handling convenience than the precision it gives up.
It is more than warehouse rent
Holding cost should include the capital tied up in stock, storage and handling, insurance, and the cost of obsolescence, damage and shrinkage. Businesses that count only warehouse space typically land at 5% and understate the real figure, which is commonly 15% to 30% of unit cost a year.
The capital component is usually the largest and the most often forgotten: money sitting in inventory is money not available for anything else, and pricing it at your actual cost of capital is what makes the EOQ answer meaningful.
Steady demand, instant replenishment, no discounts
The formula assumes demand is constant and known, the full order arrives at once, lead time is fixed, and no stockouts occur. Real demand is variable and lumpy, which is why EOQ is paired with safety stock and a reorder point rather than used alone.
It also assumes a single unit price. Where a supplier offers quantity discounts, the optimum can jump to a price-break quantity that the plain formula never suggests — compare total cost at the EOQ against total cost at each break before deciding.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Results are estimates for planning and analysis based on the figures you enter. They are not accounting, tax, or financial advice — verify with your own records and a qualified professional before making decisions.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Tested the square-root EOQ formula and confirmed the result is a genuine cost minimum by evaluating total cost either side of it.
Tested that ordering cost and holding cost are equal at the optimum, which is the defining property of the EOQ solution.
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