Orders / year
14.6
Free calculator
Type your annual demand, fixed cost per order, and annual holding cost per unit. Your economic order quantity updates live. No email, no gate, nothing leaves this page.
The calculator
The boxes start filled with an illustrative example, not a benchmark. Replace it with your own numbers.
The cost of placing an order regardless of size: shipping, handling, admin.
Storage, insurance, and capital tied up, per unit, per year.
Economic order quantity
Order about 411 units at a time. The exact economic order quantity works out to 410.8, round up since you can't order a fraction of a unit. At this size, you'll place roughly 14.6 orders a year.
Annual ordering cost and annual holding cost come out equal at this order size. That's not a coincidence, it's what "economic" means in EOQ: the formula finds the exact point where those two costs, which move in opposite directions as order size changes, cross.
EOQ = sqrt( (2 * annual demand * fixed cost per order) / annual holding cost per unit ) orders per year = annual demand / EOQ annual ordering cost = orders per year * fixed cost per order annual holding cost = (EOQ / 2) * annual holding cost per unit
This is the standard EOQ formula used in inventory management, sometimes called the Wilson formula, not something we invented.
See it on your own data Real numbers from your Shopify store, not a guess.
This assumes steady, known annual demand and a fixed cost per order that don't actually change. Real demand is seasonal, and lead times and costs fluctuate through the year, so an order size calculated once in January is not guaranteed to still be right in July.
Treat EOQ as a useful starting anchor for order size, not a number to follow blindly on every single order.
Questions
Economic order quantity: the order size that minimizes the combined cost of ordering (placing orders) and holding (storing what you've ordered). Order too little at a time and you pay ordering costs too often. Order too much and you tie up cash and space holding it. EOQ finds the size where those two costs balance out at their lowest combined total.
Because it's minimizing the sum of two costs that move in opposite directions as order size grows: ordering cost falls as orders get bigger (fewer of them), while holding cost rises (more sitting in inventory at once). The square root is what falls out of finding the exact point where that trade-off is optimized, not an arbitrary choice.
No, and this is a real limitation. Classic EOQ assumes a flat cost per unit regardless of order size. If your supplier offers a lower price at higher volumes, that changes the true optimal order size and the plain formula above won't capture it on its own.
Whenever demand, holding cost, or ordering cost shifts meaningfully, there's no fixed cadence that's right for every business. A seasonal category might be worth rechecking every quarter, a stable one far less often.
Different questions. EOQ answers how much to order. Reorder point answers when to order. They work together: EOQ sets your order size, and the reorder point calculator tells you the inventory level that should trigger placing that order.
Next
Upstream recalculates EOQ per SKU as demand, ordering cost, and holding cost shift, using your own store data, instead of a number you have to remember to update by hand.