Free EOQ Calculator (Economic Order Quantity)

How to use this EOQ calculator

This calculator solves the economic order quantity: the PO size where yearly ordering cost equals yearly holding cost. Enter annual demand, the fixed cost of placing one order, and your holding cost. Three inputs produce the optimal order size, orders per year, and the cost curve around it.

• Use the holding cost rate if you only know unit cost. 25-30% per year fits most FBA products.
• Enter your current order size to see the yearly dollar difference against EOQ.
• Check the cost curve: if your size sits in the flat bottom, do not bother changing.

The EOQ formula

EOQ = √(2DS ÷ H). D is annual demand in units, S is the fixed cost per order, and H is the yearly cost of holding one unit. The square root is why doubling demand does not double your order size: it raises EOQ by only 41%.

At the optimum, yearly ordering cost and yearly holding cost are equal. Place orders more often than EOQ suggests and paperwork plus inspections eat you; order less often and storage does. The formula finds the point where the two costs cross.

What counts as ordering and holding cost

Ordering cost is everything you pay per PO regardless of size: supplier setup fees, inspections, freight booking, and prep coordination. An order with a $150 inspection and $300 of booking and coordination runs $450 flat. Holding cost is what one unit costs to keep for a year: storage, tied-up cash, insurance, and shrink.

Inventory textbooks put typical holding cost at 20-30% of unit value per year, which is why the calculator defaults to 28%. For FBA, sanity-check that rate: add what Amazon charges to store one unit for twelve months to your yearly cost of capital, then divide by unit cost.

Worked example: 11,700 units a year

Say you sell 11,700 units a year, about 32 a day. Each PO costs $450 to place, and your $8 unit carries a 28% holding rate, so H is $2.24. EOQ = √(2 × 11,700 × 450 ÷ 2.24) = 2,168 units per order.

• Cadence: 11,700 ÷ 2,168 is 5.4 orders a year, one PO roughly every 68 days.
• Cost split: about $2,428 a year in ordering plus $2,428 in holding, $4,857 total.
• Sanity check: the two costs match at the optimum, which is how you know the math landed.

Why being 20% off EOQ barely matters

The EOQ cost curve is flat near its bottom. Order 20% more or less than the optimum and total cost rises by only 2-3%; even a 50% overshoot adds about 8%. Precision matters less than direction, so treat EOQ as an anchor, not a commandment.

This is why the calculator shows the curve instead of a single verdict. If a supplier MOQ, a container fill, or a price break pushes you off the exact number, the flat bottom means the detour is usually cheap. Chase the expensive gaps, ignore the rounding.

EOQ limits for Amazon sellers

Classic EOQ assumes steady demand, instant restocking, and unlimited storage, and Amazon breaks all three assumptions. Use the output as a baseline, then bend it for the four realities below before you cut a PO. The formula still earns its keep by pricing every deviation you make.

• Seasonality: run the formula per season with that season's demand, not a yearly average.
• MOQs: if the supplier minimum exceeds EOQ, the curve tells you what the minimum costs you.
• Price breaks: a 5% unit discount often beats a few points of holding efficiency. Compare totals.
• Storage limits: FBA capacity limits can cap your order size below the optimum. Order the cap.