Accounting Economic Order Quantity Calculator Examples
See worked EOQ examples for small, regular, and high-volume inventory replenishment scenarios.
These examples show how annual demand, cost per order, and annual holding cost per unit affect the economic order quantity, order frequency, and estimated inventory costs.
Small stock item with moderate holding cost
An office supplies team expects to use 2,400 units annually and wants to estimate an efficient replenishment quantity.
Input Summary
Annual demand
2,400 units
Cost per order
$30
Annual holding cost per unit
$3
Unit purchase cost
$15
Calculation Breakdown
- 1Economic order quantity√((2 × 2,400 × 30) / 3)219.09 units
- 2Orders per year2,400 / 219.0910.95 orders
- 3Annual ordering cost10.95 × $30$328.63
- 4Annual holding cost(219.09 / 2) × $3$328.63
- 5Total annual inventory cost(2,400 × $15) + $657.27$36,657.27
Result Summary
Total annual inventory cost
$36,657.27
Accounting Economic Order Quantity Calculator
The estimated EOQ is 219 units, with relevant annual ordering and holding costs of about $657.27.
Regularly used product
A retailer expects annual demand of 10,000 units and has a $50 cost for each replenishment order.
Input Summary
Annual demand
10,000 units
Cost per order
$50
Annual holding cost per unit
$2
Unit purchase cost
$20
Calculation Breakdown
- 1Economic order quantity√((2 × 10,000 × 50) / 2)707.11 units
- 2Orders per year10,000 / 707.1114.14 orders
- 3Average inventory707.11 / 2353.55 units
- 4Relevant annual inventory cost$707.11 + $707.11$1,414.21
- 5Total annual inventory cost(10,000 × $20) + $1,414.21$201,414.21
Result Summary
Total annual inventory cost
$201,414.21
Accounting Economic Order Quantity Calculator
The estimated EOQ is 707 units and estimated annual ordering and holding cost is $1,414.21.
High-volume item with higher order cost
Annual demand is 50,000 units, while the business estimates a cost of $80 for each order.
Input Summary
Annual demand
50,000 units
Cost per order
$80
Annual holding cost per unit
$5
Unit purchase cost
$12
Calculation Breakdown
- 1Economic order quantity√((2 × 50,000 × 80) / 5)1,264.91 units
- 2Orders per year50,000 / 1,264.9139.53 orders
- 3Annual ordering cost39.53 × $80$3,162.28
- 4Annual holding cost(1,264.91 / 2) × $5$3,162.28
- 5Total annual inventory cost(50,000 × $12) + $6,324.56$606,324.56
Result Summary
Total annual inventory cost
$606,324.56
Accounting Economic Order Quantity Calculator
The estimated EOQ is 1,265 units, with about $6,324.56 in annual ordering and holding costs.
Item with expensive storage and handling
A business expects annual demand of 12,000 units and estimates an $8 annual holding cost per unit.
Input Summary
Annual demand
12,000 units
Cost per order
$40
Annual holding cost per unit
$8
Unit purchase cost
$25
Calculation Breakdown
- 1Economic order quantity√((2 × 12,000 × 40) / 8)346.41 units
- 2Orders per year12,000 / 346.4134.64 orders
- 3Average inventory346.41 / 2173.21 units
- 4Relevant annual inventory cost$1,385.64 + $1,385.64$2,771.28
- 5Total annual inventory cost(12,000 × $25) + $2,771.28$302,771.28
Result Summary
Total annual inventory cost
$302,771.28
Accounting Economic Order Quantity Calculator
The EOQ is about 346 units, requiring about 35 orders a year.
How to Read Your Results
The economic order quantity is an estimated order size, not a reorder point or safety-stock level.
Orders per year shows the approximate replenishment frequency if annual demand remains steady.
Average inventory is generally half of EOQ under the assumption that stock is used evenly between deliveries.
Annual ordering and holding cost excludes the cost of buying or making the inventory units.
Total annual inventory cost includes purchase cost, but a constant unit purchase price does not change the basic EOQ.
Assumptions & Important Notes
- All examples assume demand is steady over one year.
- Orders are assumed to arrive in full and without delay.
- Ordering and holding costs are assumed to be constant.
- Examples exclude safety stock, quantity discounts, and supplier minimum order quantities.
Related Examples
Frequently Asked Questions
What is a good EOQ example for 10,000 units of annual demand?
With a $50 order cost and a $2 annual holding cost per unit, the EOQ is about 707 units.
Why does a higher holding cost reduce EOQ?
Higher holding cost makes large average inventory more expensive, so the model favors smaller orders placed more often.
Why does a higher cost per order increase EOQ?
A higher per-order cost makes frequent ordering more expensive, so the model favors larger orders and fewer orders.
Are EOQ example results exact order quantities?
No. They are estimates that should be reviewed alongside pack sizes, lead times, storage limits, and demand uncertainty.
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