Economic Order Quantity

  • You have forecasted the market demand of your products for the year.
  • You need to order in bulk in order to meet this demand effectively.
  • You incur expenses in warehousing activities for storing and handling the products properly.
  • Your business operates a certain number of days per year. Your supplier needs some time to process your order and prepare for delivery.
  • How much will be the economic order quantity for your business?
Select your desired monetary unit.
Total number of units needed for one year. (i.e. 576,000)
Fixed cost for placing one bulk order, regardless of the number of units being ordered. (i.e. 100,000)
Cost of retaining one unit in your inventory per year (i.e. 240)
Number of days your business operates every year (i.e. 365)
Number of days your products will arrive after you have placed an order (i.e. 60)