The order size that keeps ordering and holding costs lowest, with how many orders a year and the cost of each choice.
Ordering cost: transport, your time, the call. Holding cost: rent of shelf space, interest on the money, damage and expiry, usually 15 to 30%.
| Order size | Yearly cost |
|---|---|
EOQ balances two costs: ordering often (more trips and calls) against holding a lot (money and space tied up). It suits steady sellers. For items with a supplier minimum, a carton size or a price break, round to what the supplier sells and check the yearly cost in the table.
Doing this every month?
Ovelit Stock works these numbers out from your real sales every morning: reorder points, what to buy, what is expiring and what is not selling. Free for one shop.
Start freeSaved in this browser only, nothing is uploaded. A plain-language starting point, not legal or tax advice.
