Glossary
What is Economic Order Quantity (EOQ)?
Last updated July 2026
Definition
Economic order quantity (EOQ) is the order size that minimizes the combined cost of ordering and holding inventory.
Also known as: EOQ
Formula
EOQ = √((2 × Demand × Order Cost) ÷ Holding Cost) EOQ balances two opposing costs: order too often and ordering cost rises; order too much and carrying cost rises. The optimum sits where they trade off.
It's a useful baseline, but real reorder decisions also weigh supplier minimums, price breaks, and demand variability.
Part of Working capital & inventory turns.
See what your inventory is really costing you.
Tell us where the cash is trapped — excess stock, idle surplus, slow RFQs — and we'll show you the outcome Maintained can unlock.