The EOQ is a formula that helps you to minimize the production, order, & holding costs of any products you are doing business of. You will need your client’s yearly demand, order costs, & holding costs to calculate the term.
What is EOQ Calculator Used for?
Let’s see the uses of calculators to measure the economic order quantity; they are quite simple:
- Man is not error-proof; therefore, you will need a calculator to bring important calculations in large scale because everything else depends on your quantity.
- For instance, you can minimize the production or order cost; moreover, you can have the production in the right range because if you manufacture less, you may lose the clients. On the other hand, excessive production will bring the extra cost of storage.
Economic Order Quantity Formula:
If you want to know the economic order quantity formula the see it….
EOQ= √((2 x Annual Demand x Per order Ordering Cost) ÷ Annual Carrying Costs)
Economic Order Quantity Formula Example:
Suppose your store 1 product annual demand 6000, per order ordering cost 150, annual carrying cost per unit=20.
Now see that how our calculator calculate this.
EOQ= √((2 x 6000 x 150) ÷ 20)
EOQ= √(1,800,000 ÷ 20)
EOQ = √90000
EOQ = 300
That means economics order quantity (EOQ) is 300.
Economic Order Quantity Formula Excel:
If you want to calculate economic order quantity on excel then follow the formula:
EOQ= SQRT * ((2 * Annual Demand * Per order Ordering Cost) / Annual Carrying Costs)
How to Calculate Economic Order Quantity in Excel:
If you want to calcuate the EOQ value in excel then at first make a sheet like the below table.
|1||Annual Demans (Unit):|
|2||Per order ordering cost:|
|3||Annual carriying cost per Unit:|
Then input your expected value on the first 3 cell (avoid EOQ row). Now use the formula in B:
=SQRT * ((2* B1 * B2) / B3)
You can also see the below screenshot for better understand.