Economic Order Quantity (Wilson EOQ)

Which the backward-looking inventory-turnover ratio never sizes: EOQ = sqrt(2 D S / H), balancing the fixed per-order cost (setup, freight, receiving) against the annual holding cost (capital, storage, spoilage). 12,000 units/yr at $50 per order and $3/unit/yr to hold -> 632 units per order (19 orders/yr, every 19 days) at $1,897/yr total. The total-cost curve is FLAT near the minimum, so rounding to a case or pallet quantity barely raises cost -- but hand-to-mouth or a full-truckload discount does. Steady demand, no quantity discounts. A planning aid; the demand, lead time, and supplier terms govern.

EOQ = sqrt(2 x D x S / H); orders_per_year = D / EOQ; cycle_days = 365 / orders_per_year; total_annual = sqrt(2 x D x S x H).

The Wilson economic order quantity (EOQ) inventory model, by name; the actual demand, lead time, and supplier terms govern.

The Wilson EOQ formula is a standard published inventory-management result; the annual demand, order cost, and holding cost come from the business's records.

Estimate. AHJ and licensed professional govern.

Field names used by the API: annual_demand, order_cost, holding_cost, eoq, orders_per_year, total_annual

• Balances two costs EOQ minimizes fixed ordering cost plus holding cost; the two are equal at the EOQWilson EOQ model
• Flat near minimum the total-cost curve is flat near the EOQ, so rounding to a case quantity barely hurtsWilson EOQ model
• No discounts assumes steady demand and no quantity discounts; a discount tier needs a separate comparisonscope of this tile