EOQ with Quantity Discounts Calculator


Demand per year


Cost of placing an order, per order


Annual Inventory Holding Cost: as percentage of item cost


Per Unit Cost of Item


EOQ With Quantity Discount Solution

EOQ =  

EOQ with Quantity Discount Formula

The economic order quantity formula is:

EOQ = √ (2DS) / (IC)


D is the Demand of the product per unit of time

S is the cost of placing the order

I represents annual inventory holding cost as percent of item total cost

C is unit cost of the item

**Note that D and H must be for the same period of time (i.e. months, years, etc).

What is Economic Order Quantity with Quantity Discounts

When considering quantity discounts to determine the EOQ, it is essentially the same formula, but rather than H (holding cost) you evaluate the cost of the item (C) and multiply it by the inventory holding cost of the item as a percent of the cost on an annual basis.