Inventory Calculator
Find your reorder point and Economic Order Quantity (EOQ) to manage stock without running out or over-ordering.
Formula last reviewed 4 August 2026 · How we verify our calculators
Reorder point
- Economic order quantity (EOQ)
- 1,000
- Orders per year
- 10
Updates live as you type
Frequently asked questions
It is the stock level at which you place a new order: average daily usage × lead time, plus safety stock. Ordering at this level avoids st-outs while the next batch arrives.
EOQ is the order size that minimises total ordering and holding costs, calculated as √(2 × annual demand × ordering cost ÷ holding cost per unit).
It buffers against demand spikes and supplier delays. Without it, any variation in usage or lead time risks running out before replenishment.
Ordering more often raises ordering costs but lowers holding costs; ordering in bulk does the reverse. EOQ finds the order size where the two are balanced.
Two numbers: when to order, and how much
50 units average daily usage, a 7-day lead time and 100 units of safety stock puts the reorder point at (50 × 7) + 100 = 450 units — the stock level that triggers the next order, timed so fresh stock arrives right as it's needed. Separately, for 10,000 units of annual demand, a ₹100 ordering cost and a ₹2 annual holding cost per unit, the EOQ formula — √(2 × annual demand × ordering cost ÷ holding cost) — gives √1,000,000 = 1,000 units per order, meaning roughly 10 orders a year. These two figures answer genuinely different questions: reorder point says *when*, EOQ says *how much*.
Why reorder point exists — and what safety stock is actually for
Average daily usage × lead time alone tells you how much stock gets consumed while a replenishment order is in transit. Safety stock sits on top of that as a buffer specifically for the parts you can't predict — a demand spike, a supplier delay — so a normal fluctuation doesn't turn into an actual stockout before the next batch arrives.
Why EOQ isn't "order as much as possible" or "order as little as possible"
Order in smaller batches than the EOQ and ordering costs pile up from placing orders too frequently; order in larger batches and holding costs — warehouse space, capital tied up in unsold stock, spoilage risk — rise instead. EOQ is specifically the order size where those two opposing costs are balanced, not simply the smallest or largest number that seems safe.
Together these two figures form the backbone of practical stock control for shops, warehouses and manufacturers. Enter realistic figures for usage, lead time, and ordering and holding costs to get targets worth acting on — then revisit them as demand or supplier terms change, since both numbers are only as good as the inputs behind them.