How to Use the Optimal Order Quantity Calculator
The Optimal Order Quantity Calculator helps you find the ideal order size that minimizes total inventory costs.
- Enter Annual Demand (D) — How many units you need per year.
- Enter Ordering Cost (S) — The fixed cost incurred each time you place an order (administrative fees, shipping setup, etc.).
- Choose Holding Cost Method — Enter either a fixed holding cost per unit per year, or a percentage of the unit purchase cost.
- Optional Fields — Enter lead time, working days per year, and safety stock for reorder point calculation.
- Review Results — The Optimal Order Quantity Calculator displays EOQ, order frequency, average inventory, order cycle, cost breakdown, and sensitivity analysis.
Formula & Theory — Optimal Order Quantity Calculator
The Optimal Order Quantity Calculator is based on the classic Economic Order Quantity (EOQ) model:
EOQ = √((2 × D × S) / H)| Symbol | Meaning |
|---|---|
| D | Annual demand (units/year) |
| S | Ordering cost per order |
| H | Holding cost per unit per year |
Total Inventory Cost
Total Cost = (D / Q × S) + (Q / 2 + SS) × HWhere Q is the order quantity and SS is safety stock.
Reorder Point (ROP)
ROP = (D / Working Days) × Lead Time + Safety StockSensitivity Analysis
The Optimal Order Quantity Calculator also performs sensitivity analysis by computing total cost at different multiples of EOQ (e.g. 80%, 100%, 120%) to show how sensitive your costs are to order quantity changes.
Use Cases for the Optimal Order Quantity Calculator
- E-commerce sellers — Determine optimal purchase batches to reduce storage fees and avoid stockouts.
- Foreign trade and wholesale — Estimate how many units to order per shipment to balance freight costs and inventory holding.
- Retail replenishment — Plan store restocking quantities that minimize total procurement and warehousing costs.
- Small warehouse management — Use the Optimal Order Quantity Calculator to set reorder points and avoid overstocking.
- Procurement planning — Compare different order scenarios and understand the cost impact of ordering more or less than the EOQ.
The Optimal Order Quantity Calculator is a practical tool for estimating procurement batches and reducing inventory pressure. Results are for business decision reference only and do not replace enterprise ERP systems, supply chain software, or professional financial advice.