How to Calculate Economic Order Quantity
What is Economic Order Quantity?
Economic Order Quantity Calculator helps logistics and supply chain professionals optimize operations and reduce costs.
Formula
EOQ = √(2DS/H) where D=annual demand, S=order cost, H=holding cost
Step-by-Step Guide
- 1Enter annual demand, ordering cost per order, annual holding cost per unit
- 2Apply the formula with your specific values
- 3Use the result to optimize operations or costs
Worked Examples
Input
D=1000, S=$50, H=$5
Result
EOQ = √(2×1000×50/5) = √20000 ≈ 141 units
Common Mistakes to Avoid
- ✕Using incorrect units or dimensions in the calculation
- ✕Ignoring surcharges and accessorial fees
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