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Economic Order Quantity Solution

STEP 0: Pre-Calculation Summary
Formula Used
economic_order_quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2)
EOQ = ((2*Cf*D)/Ch)*(1/2)
This formula uses 3 Variables
Variables Used
Fixed cost per order- Fixed costs per order are the cost that does not change with an increase or decrease in the amount of goods or services produced or sold.
Demand in units per year- Demand in units per year represents the total demands of the unit per year.
Carrying cost per unit per year- Carrying cost per unit per year refers to the total cost of holding inventory for a unit per year.
STEP 1: Convert Input(s) to Base Unit
Fixed cost per order: 500 --> No Conversion Required
Demand in units per year: 2000 --> No Conversion Required
Carrying cost per unit per year: 500000 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
EOQ = ((2*Cf*D)/Ch)*(1/2) --> ((2*500*2000)/500000)*(1/2)
Evaluating ... ...
EOQ = 2
STEP 3: Convert Result to Output's Unit
2 --> No Conversion Required
FINAL ANSWER
2 <-- Economic Order Quantity
(Calculation completed in 00.016 seconds)

1 Other formulas that you can solve using the same Inputs

Total Inventory Cost
total_inventory_cost = Carrying cost per unit per year*(Quantity of each order/2)+Fixed cost per order*(Demand in units per year/Quantity of each order) Go

Economic Order Quantity Formula

economic_order_quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2)
EOQ = ((2*Cf*D)/Ch)*(1/2)

How to Calculate Economic Order Quantity?

Economic Order Quantity calculator uses economic_order_quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2) to calculate the Economic Order Quantity, Economic order quantity is an equation for the inventory that determines the ideal order quantity a company should purchase for its inventory given a set cost of production, demand rate, and other variables. Economic Order Quantity and is denoted by EOQ symbol.

How to calculate Economic Order Quantity using this online calculator? To use this online calculator for Economic Order Quantity, enter Fixed cost per order (Cf), Demand in units per year (D) and Carrying cost per unit per year (Ch) and hit the calculate button. Here is how the Economic Order Quantity calculation can be explained with given input values -> 2 = ((2*500*2000)/500000)*(1/2).

FAQ

What is Economic Order Quantity?
Economic order quantity is an equation for the inventory that determines the ideal order quantity a company should purchase for its inventory given a set cost of production, demand rate, and other variables and is represented as EOQ = ((2*Cf*D)/Ch)*(1/2) or economic_order_quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2). Fixed costs per order are the cost that does not change with an increase or decrease in the amount of goods or services produced or sold, Demand in units per year represents the total demands of the unit per year and Carrying cost per unit per year refers to the total cost of holding inventory for a unit per year.
How to calculate Economic Order Quantity?
Economic order quantity is an equation for the inventory that determines the ideal order quantity a company should purchase for its inventory given a set cost of production, demand rate, and other variables is calculated using economic_order_quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2). To calculate Economic Order Quantity, you need Fixed cost per order (Cf), Demand in units per year (D) and Carrying cost per unit per year (Ch). With our tool, you need to enter the respective value for Fixed cost per order, Demand in units per year and Carrying cost per unit per year and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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