EOQ Calculator

Holding cost (carrying cost) is everything it costs to keep one unit in stock for a year: storage space, insurance, capital tied up in the inventory, shrinkage, and obsolescence risk. A common shortcut is 20–30% of the item's unit cost per year — so a $15 item typically costs $3–$4.50 per year to hold. Use the shortcut if you do not have exact figures; EOQ is not very sensitive to small errors.

Order cost is the fixed cost of placing one order regardless of size: staff time to create and approve the purchase order, shipping and receiving handling, and any per-order supplier fees. It is not the cost of the goods themselves. For a small business, $25–$75 per order is a typical range once you count the admin time honestly.

EOQ answers HOW MUCH to order; the reorder point answers WHEN to order. They work together: when stock falls to the reorder point, you place an order for one EOQ. EOQ minimizes ordering-plus-holding cost; the reorder point protects against stockouts during supplier lead time. Use our reorder point calculator to get the second number.

Skip EOQ when suppliers impose case packs or minimum order quantities that dominate the decision, when demand is highly seasonal or lumpy (EOQ assumes steady demand), when items are perishable or fast-obsoleting, or when quantity discounts change the math. In those cases, order to the supplier constraint or use a min/max policy instead — EOQ is a guide, not a law.

Yes — free, no signup, and it runs in your browser. StockZip publishes it because businesses optimizing order sizes usually track inventory too: StockZip fires low-stock alerts at your reorder point so you know when to place that EOQ-sized order. The free plan covers 100 items.