Accounting Economic Order Quantity (Per-Unit) Calculator Examples
See worked EOQ examples for small, regular, and higher-volume inventory ordering situations.
These examples show how annual demand, ordering cost, and annual holding cost per unit affect the suggested order quantity and ordering frequency. All figures are planning estimates based on the standard EOQ model.
Small retail consumable inventory
Low-volume inventory with a relatively high cost to place each order.
Input Summary
Annual demand
1,200 units
Ordering cost per order
$30.00
Annual holding cost per unit
$3.00
Purchase cost per unit
$12.00
Working days per year
250 days
Calculation Breakdown
- 1EOQ√((2 × 1,200 × 30) ÷ 3)154.92 units
- 2Orders per year1,200 ÷ 154.927.75 orders
- 3Relevant annual cost(7.75 × $30.00) + (77.46 × $3.00)$464.76
- 4Days between orders250 ÷ 7.7532.27 working days
Result Summary
Days between orders
32.27 working days
Accounting Economic Order Quantity (Per-Unit) Calculator
Ordering about 155 units at a time produces an estimated annual ordering and holding cost of $464.76.
Regularly used manufacturing component
Medium annual demand with steady usage and standard carrying costs.
Input Summary
Annual demand
10,000 units
Ordering cost per order
$50.00
Annual holding cost per unit
$2.50
Purchase cost per unit
$20.00
Working days per year
250 days
Calculation Breakdown
- 1EOQ√((2 × 10,000 × 50) ÷ 2.50)632.46 units
- 2Orders per year10,000 ÷ 632.4615.81 orders
- 3Average inventory632.46 ÷ 2316.23 units
- 4Total annual inventory cost(10,000 × $20.00) + $790.57 + $790.57$201,581.14
Result Summary
Total annual inventory cost
$201,581.14
Accounting Economic Order Quantity (Per-Unit) Calculator
The estimated EOQ is 632 units, with about 15.8 orders per year and $1,581.14 in annual ordering and holding costs.
High-volume low-cost supply item
High demand where a low holding cost supports a larger order quantity.
Input Summary
Annual demand
120,000 units
Ordering cost per order
$75.00
Annual holding cost per unit
$1.50
Purchase cost per unit
$4.00
Working days per year
300 days
Calculation Breakdown
- 1EOQ√((2 × 120,000 × 75) ÷ 1.50)3,464.10 units
- 2Orders per year120,000 ÷ 3,464.1034.64 orders
- 3Relevant annual cost(34.64 × $75.00) + (1,732.05 × $1.50)$5,196.15
- 4Days between orders300 ÷ 34.648.66 working days
Result Summary
Days between orders
8.66 working days
Accounting Economic Order Quantity (Per-Unit) Calculator
The estimate suggests ordering roughly 3,464 units per replenishment, with about 35 orders a year.
Higher holding-cost inventory item
Moderate demand with a comparatively high annual holding cost per unit.
Input Summary
Annual demand
6,000 units
Ordering cost per order
$40.00
Annual holding cost per unit
$12.00
Purchase cost per unit
$80.00
Working days per year
250 days
Calculation Breakdown
- 1EOQ√((2 × 6,000 × 40) ÷ 12)200 units
- 2Orders per year6,000 ÷ 20030 orders
- 3Annual ordering cost30 × $40.00$1,200.00
- 4Annual holding cost(200 ÷ 2) × $12.00$1,200.00
Result Summary
Annual holding cost
$1,200.00
Accounting Economic Order Quantity (Per-Unit) Calculator
The estimated EOQ is 200 units, requiring 30 orders per year and producing $2,400.00 in annual ordering and holding costs.
How to Read Your Results
EOQ is a planning quantity, not necessarily the exact quantity to order every time.
Orders per year shows the estimated replenishment frequency needed to meet annual demand.
Days between orders is based on working days and assumes demand is evenly spread over the year.
Annual ordering and holding cost excludes the cost of buying the inventory itself.
Total annual inventory cost includes purchase cost, ordering cost, and holding cost.
Assumptions & Important Notes
- Demand is stable throughout each example year.
- Orders arrive in full and replenishment is available when needed.
- No quantity discounts, stockouts, safety stock, or lead-time uncertainty are included.
- The purchase price per unit remains constant regardless of order quantity.
Related Examples
Frequently Asked Questions
What happens to EOQ when ordering cost increases?
EOQ increases because larger, less frequent orders can reduce the number of costly purchase orders.
What happens to EOQ when holding cost increases?
EOQ decreases because holding a large inventory balance becomes more expensive.
Can EOQ be used for seasonal products?
It can provide a starting estimate, but seasonal demand should usually be analyzed in shorter periods rather than treated as steady annual demand.
Why is total annual inventory cost much higher than relevant inventory cost?
Total annual inventory cost includes the purchase cost of all units, while relevant inventory cost includes only ordering and holding costs.
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