Inputs
Key Results
EOQ (units)
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Annual orders
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Cycle time (days)
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Avg inventory
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Reorder point (units)
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Total logistics cost
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Curves exclude purchase cost D×C which is constant across quantities. EOQ is where ordering cost and holding cost intersect and total logistics cost is minimized.
Example Scenarios
| Scenario | D | S | H | C | WorkDays | Lead | Safety | EOQ | Total Logistics Cost | Action |
|---|
Formulas Used
- EOQ = √( 2 × D × S ÷ H )
- Annual orders N = D ÷ EOQ
- Average inventory = EOQ ÷ 2
- Ordering cost = (D ÷ Q) × S
- Holding cost = (Q ÷ 2) × H
- Total logistics cost TLC(Q) = (D ÷ Q) × S + (Q ÷ 2) × H
- Purchase cost = D × C (constant w.r.t Q)
- Cycle time (days) = (EOQ ÷ D) × WorkDays
- Daily demand = D ÷ WorkDays
- Reorder point ROP = Daily demand × Lead time + Safety stock
How to Use This Calculator
- Enter D, S, and H. Optionally include unit cost C, working days, lead time, and safety stock.
- Click Calculate EOQ to compute EOQ, annual orders, cycle time, average inventory, reorder point, and costs.
- Review the cost curves. The vertical line shows the EOQ that minimizes total logistics cost.
- Use Export buttons to download the results as CSV or PDF.
- Try the example scenarios and load them into the inputs to compare configurations.
FAQs
The basic EOQ model minimizes logistics costs—ordering and holding. Purchase cost D×C is constant across order quantities. If there are quantity discounts, use scenario comparisons or an extended model.
ROP = daily demand × lead time + safety stock. Daily demand equals D divided by working days. Safety stock buffers uncertainty and service level targets.
The deterministic EOQ is a baseline. With variability, increase safety stock and recalc ROP. For strong uncertainty, consider stochastic models like Newsvendor or (Q,R) with variability inputs.
The classic model assumes no shortages. Backordering variants include a penalty cost and yield a lower optimal Q. This tool focuses on the no-shortage case.
EOQ scales with √(D×S/H). Large setup cost or demand and very low holding cost push EOQ up. The opposite pulls EOQ down. Verify units and cost bases per year.