Accounting Economic Order Quantity (Monthly) Calculator Examples
Review worked monthly EOQ examples for routine demand, higher order costs and different inventory holding rates.
These examples show how changes in monthly demand, order costs and holding costs affect the recommended inventory order size. They use the standard EOQ model and a basic reorder point without safety stock.
How to Read Your Results
The recommended order quantity is the estimated number of units to purchase or produce in each replenishment order.
Orders per month can be fractional because it is an average planning estimate over time.
Days between orders is based on the operating-day count you enter, not necessarily calendar days.
Monthly ordering and holding cost excludes the total cost of buying the inventory.
The basic reorder point covers average demand during lead time; add safety stock separately if appropriate.
Round output quantities in a practical way while considering pack sizes, minimum orders and storage limits.
Assumptions & Important Notes
- Demand is spread evenly across the operating days in each month.
- Orders arrive in full after the stated average lead time.
- Order cost and holding cost are unchanged within each example.
- No safety stock, quantity discounts or stockout costs are included.
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Frequently Asked Questions
What happens to EOQ when demand increases?
With other inputs unchanged, EOQ increases, but less than proportionally because demand is inside a square-root calculation.
What happens when the cost per order rises?
A higher order cost generally produces a larger EOQ because placing frequent small orders becomes more expensive.
What happens when the holding rate rises?
A higher holding rate generally reduces EOQ because carrying larger amounts of inventory becomes more costly.
Can EOQ be rounded to a case or pallet size?
Yes. The calculated EOQ can be used as a starting point, then adjusted for practical purchasing or storage constraints.
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