Find the optimal order quantity that minimises your total inventory cost. Used by supply chain managers across Pakistan & GCC to cut ordering and holding costs.
Enter your demand, ordering cost, and unit cost to find your optimal order quantity and annual cost savings vs your current practice.
Economic Order Quantity (EOQ) is the optimal number of units a company should order at one time to minimise total inventory costs, the sum of ordering costs and holding costs. Ordering too little means placing orders too frequently (high ordering costs). Ordering too much ties up capital and increases storage costs. EOQ finds the exact balance point.
For SMEs in Pakistan and GCC, where storage costs run 20–35% of inventory value annually and emergency procurement premiums can reach 25–40%, getting your order quantity right is one of the highest-ROI supply chain improvements available.
EOQ is calculated as: EOQ = √(2DS / H), where D = Annual Demand, S = Ordering Cost per order, H = Annual Holding Cost per unit. This calculator applies this formula and compares it to your current practice to show actual savings.
EOQ works best for items with relatively stable demand, known ordering costs, and consistent holding costs, exactly the conditions most common in manufacturing, utilities, and FMCG distribution in Pakistan. For highly seasonal or lumpy demand items, pair EOQ with a Safety Stock calculation.
Understanding the maths behind the calculator
Minimises total of ordering costs and holding costs combined.
Use alongside EOQ to complete your ordering policy.
Calculate total cost for any order quantity to confirm EOQ advantage.