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What is your optimal order quantity?

EOQ = square root of (2 × annual demand × ordering cost ÷ holding cost per unit).

Annual demand (units)

Cost per order ($)

Holding cost per unit ($/year)

Calculate

Example: 5,000 units/year, $50 per order, and $2 holding cost/unit → EOQ = √(2×5000×50÷2) ≈ 500 units per order.

EOQ tells you how much to order. Pair it with when to reorder.