# Economic Order Quantity – Calculator

Economic order quantity is a concept associated with Inventory management. It is used by firms to arrive at an order quantity at which the associated ordering costs, Inventory holding costs and shortage costs can be minimized.

It is calculated using the following formula :

EOQ = ( 2AO / C ) 1/2

Where

A = Annual demand in units ; O = Ordering cost per unit ; C = Carrying cost per unit ;

In certain cases where the Inventory Holding Cost is expressed as a percentage of cost per unit, use the calculator below :

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