Free Economic Order Quantity (EOQ) Calculator Excel Template
Calculate the optimal order quantity for every SKU. Balance ordering cost against carrying cost — the right answer is rarely "what the supplier suggests."
What you get
Working EOQ calculator using the standard Wilson formula plus practical adjustments (minimum order, supplier discounts, shelf life). Sensitivity analysis surfaces how robust each answer is.
Free 30-day trial · No credit card required · Used by manufacturers since 1991
Why manufacturers still use Excel for this
Economic Order Quantity is the most well-known inventory formula and one of the most misapplied. The Wilson formula minimizes the sum of ordering cost and carrying cost — but only under specific assumptions (steady demand, single SKU, no quantity discounts). Most real shops violate at least one assumption.
This template starts with the textbook EOQ then layers practical adjustments: minimum order quantities from suppliers, quantity discounts (when ordering more cuts unit price), shelf life (limiting order size for short-life materials), and storage constraints. The output is a practical order quantity, not just a math output.
Sensitivity analysis matters. EOQ is famously insensitive to errors in inputs — being 20% off on demand changes the optimal order quantity by less than 10%. The template shows the sensitivity so you stop tuning to false precision.
What's inside the template
EOQ input grid
Per SKU: annual demand, order cost ($/order), unit cost, carrying cost rate (% of unit cost per year). Standard inputs.
Wilson formula calculation
EOQ = √(2 × annual demand × order cost ÷ carrying cost per unit). Auto-calculated per SKU.
Practical adjustments
Minimum order quantity override, supplier discount break analysis, shelf-life cap, storage constraint cap.
Annual cost analysis
Order frequency, total ordering cost, average inventory cost, total annual cost. Shows the dollars at stake.
Sensitivity analysis
How much does optimal EOQ change if demand is ±20%? If order cost is ±50%? Surfaces which inputs need precision and which do not.
Final recommended order quantity
Practical recommendation per SKU considering all constraints, not just the textbook formula output.
How to use this template
A practical walkthrough — five steps from blank spreadsheet to a working schedule.
- 1
Estimate order cost honestly
Order cost includes: purchase order processing, receiving, inspection, putaway. Most shops have $50–250/order order cost. Underestimating order cost biases EOQ low (more frequent small orders); overestimating biases high.
- 2
Use realistic carrying cost
Carrying cost = cost of capital + storage + obsolescence + insurance + handling. Typically 20–30% of unit cost per year. Underestimating this biases EOQ high (large orders that look efficient but tie up cash).
- 3
Apply EOQ to A items, simpler rules to B and C
EOQ is precision tuning. Apply it to A SKUs (top 20% of spend). For B and C items, simpler rules (fixed reorder quantity, two-bin) cost less to maintain and produce comparable results.
- 4
Revisit EOQ when demand or cost changes meaningfully
EOQ is robust to small input changes; not robust to large ones. When annual demand or unit cost changes 30%+, recalculate. Otherwise leave it alone.
When you outgrow this template
Excel is the right answer for early-stage scheduling — until it isn't. Here are the warning signs that you need a real production scheduling tool.
If three or more of these apply, you have outgrown Excel scheduling. The good news: you do not have to leave Excel behind. Resource Manager for Excel (RMX) is a real finite-capacity scheduling engine that runs as an Excel add-in — so your team keeps the interface they know while gaining the scheduling power of a dedicated APS tool.
Learn about RMXFrequently asked questions
When does EOQ NOT apply?+
EOQ assumes steady demand and continuous review. It does NOT apply well when: demand is lumpy (a few large orders per year), supplier requires large minimums that exceed EOQ, the material has shelf life shorter than EOQ's implied stock cover, or you have quantity discounts that change the optimal point. The template handles each adjustment.
What carrying cost percentage should I use?+
20% is the textbook answer; 25–30% is more realistic for most manufacturing. The components: cost of capital (5–10%), storage and handling (5–10%), obsolescence and shrinkage (3–8%), insurance and taxes (2–5%). Use a higher % for high-obsolescence categories (fashion, technology) and a lower % for stable categories.
Why does EOQ recommend so many small orders?+
Because the carrying cost beats the ordering cost when ordering is cheap. If ordering cost is $50 and carrying cost is 25%, optimal order frequency is high. If your shop genuinely has $50 ordering cost (automated PO), this is right; if your ordering process is manual and burdensome, $50 is unrealistically low.
How is EOQ different from reorder point?+
EOQ = how much to order. Reorder point = when to order. They are independent calculations that work together: when stock hits the reorder point, you order EOQ quantity. Both need to be set; one without the other does not work.
Get the free template — plus the tool that grew up around it
The template is the starting point. Resource Manager for Excel (RMX) is what manufacturers move to when their Excel scheduler starts breaking. 35+ years in production, free 30-day trial.