Economic Order Quantity Calculator
Order in large batches and you tie up money in stock. Order in small ones and you pay the ordering cost over and over. The economic order quantity is where those two costs balance, and the tidy fact underneath it is that at the optimum they are exactly equal — which gives you a way to check any answer in seconds without redoing the algebra.
What this generator does
Computes the classic square-root EOQ from annual demand, cost per order and holding cost per unit per year, then reports the resulting order frequency, cycle length and both cost components. It also evaluates the total cost 10% above and 10% below the answer, so the shape of the curve near the minimum is visible.
How to use this tool
- Generate a scenario, or read the figures and substitute your own.
- Check the answer using the equality: ordering cost and holding cost should match.
- Look at the cost 10% either side of the optimum — it barely moves.
- Round to a convenient case or pallet quantity; the flat curve means you lose very little.
Understanding the controls
- Generate
- Produces a fresh scenario with plausible demand, ordering and holding costs so the relationship between them can be explored.
- Seed
- Any word reproduces the same scenario, so a worked example can be set and marked later.
Common use cases
- Teaching the inventory cost trade-off with a checkable answer
- Sanity-checking an order quantity against the textbook optimum
- Showing why the exact EOQ rarely matters in practice
- Worked examples for an operations management course
- Producing practice problems with known answers
How this generator works
The EOQ formula is the square root of twice demand times ordering cost, divided by holding cost — the point where the falling ordering-cost curve crosses the rising holding-cost line. The check does not trust that derivation: it confirms the two cost components are equal at the answer, and evaluates the total cost either side to confirm the point really is a minimum rather than merely a formula's output.
Randomness and fairness
The scenario figures — demand, ordering cost, holding cost — are drawn randomly so you can explore the relationship between them. The order quantity itself is then a deterministic calculation. A seed reproduces the same scenario exactly and is therefore explicitly not cryptographically secure; without one the browser's cryptographically secure generator supplies the figures.
For how randomness is produced across the whole site, see how Generate Random works.
Limitations and good to know
- Assumes steady, known demand — real demand is lumpy and uncertain, which the newsvendor model addresses instead.
- Assumes instant replenishment with no lead time; the reorder point calculator covers that separately.
- No quantity discounts, which change the answer to a comparison between price breaks.
- No capacity limit on storage.
- A worked scenario is not kept — copy the figures or note the seed.
Privacy and your data
The calculation runs entirely in your browser. Nothing about the figures you generate or enter is transmitted or kept.
Related generators
- Reorder Point CalculatorThe stock level at which to reorder, splitting lead-time demand from safety stock and showing why safety stock grows with the square root of lead time.
- Newsvendor Problem GeneratorSingle-period stocking problems where every candidate quantity is evaluated against every demand outcome, so the best one is found rather than approximated.
- Break-Even CalculatorThe volume at which revenue finally covers total cost, with the profit table either side of it so the shape is visible.
- Budget Allocation GeneratorSplits a total across weighted lines in whole units, with the parts summing to exactly the total rather than nearly it.