Simple EOQ Calculator
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(1) the cost of holding inventory, and
(2) the cost of ordering.
Both costs work in such a way that you need to balance them; there is a trade-off: stock too much and your holding costs will eat your profits, keep your ordering frequency at high levels and your ordering costs will increase.
For the sake of supply chain management efficiency there are many models available. However, one of the most utilised systems is back from 1913, the ‘Economic Order Quantity’ (EOQ) model, developed by Production Engineer Ford Harris.
This simple model allows to calculate the order size, and hereby the reorder point, that minimises the total cost of purchasing, ordering and holding stocks. The simplicity of the model resides in its ability to calculate such optimal quantity only considering three figures: demand, ordering cost, and holding cost.
This applications calculates the EOQ given an annual demand estimate, together with the total yearly orders and the total annual cost. Further, you can choose to calculate the EOQ when shortages may arise.
If you consider demand is uncertain, then the calculator will make use of the 'Newsvendor model', and it will calculate the optimal monthly order given the selling price of the product, your costs, and the average monthly demand and its standard deviation.
Tags: eoq, newsvendor model calculator.
[1.06] Now it can be installed in the SD card.
[1.05] New model added (EOQ with shortages) and improvements in the user interface.
[1.02] Improvements in the user interface.