Calculate Economic Order Quantity (EOQ), reorder point and safety stock impact for inventory planning. Useful for retail, manufacturing, D2C brands and warehouses.
Units sold or consumed per year.
Buffer units kept for uncertainty.
EOQ
632 units
Reorder point
380 units
Orders per year
19.0
Annual ordering cost
₹9,487
Annual holding cost
₹9,487
Total inventory cost
₹18,974
EOQ assumes stable demand, constant ordering cost and constant holding cost. Seasonal products and volatile supplier lead times need additional safety stock planning.
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Inventory is one of the largest working capital investments for any product business - too little inventory means stockouts, lost sales, and unhappy customers; too much means tied-up cash, warehousing costs, obsolescence and potential write-offs. The classic Economic Order Quantity (EOQ) model, developed in 1913, remains the foundation of scientific inventory management. This calculator helps retail stores, kirana shops, e-commerce sellers, wholesalers, distributors, and small manufacturers determine the optimal order quantity, reorder point, and safety stock for each SKU they manage.
Indian context matters: GST input tax credit considerations, supplier credit terms (45-90 day payment cycles are common in B2B), monsoon-driven demand variability for many categories, festive season demand spikes (Diwali, Holi, Eid, Navratri), and longer transit times for inter-state procurement all influence inventory decisions. This calculator provides the theoretical optimum; combine it with practical knowledge of your supply chain, customer behaviour and cash flow constraints to set actual order policies. For multi-SKU businesses, apply EOQ analysis to A-class items first (top 20% SKUs by value, contributing ~80% of revenue) where the optimization payoff is highest.
Enter annual demand, ordering cost and annual holding cost per unit.
Enter daily demand, supplier lead time and safety stock.
Review EOQ, orders per year, reorder point and total inventory cost.
Adjust inputs to balance ordering cost against carrying cost.
EOQ balances two costs: placing too many orders increases ordering cost, while ordering too much at once increases holding cost. Reorder point tells you when to buy again, based on lead time demand plus safety stock.
EOQ = √(2 × Annual Demand × Ordering Cost / Holding Cost)
EOQ formula: EOQ = √(2 × Annual Demand × Ordering Cost / Holding Cost per unit per year). Derived by minimising the total inventory cost (ordering cost + holding cost) with respect to order quantity. Annual demand is units sold per year. Ordering cost is the cost of placing one order - supplier coordination, paperwork, transportation, inspection, payment processing. Holding cost per unit per year includes warehouse rent, insurance, capital cost (interest), shrinkage, and obsolescence - typically 15-25% of unit value annually for typical Indian SMBs.
Reorder Point (ROP): ROP = (Daily Demand × Lead Time in days) + Safety Stock. When inventory reaches this level, place a new order. Lead time is the number of days from order placement to stock arrival - typically 5-15 days for local suppliers, 20-45 days for imports including customs clearance. Daily demand is annual demand / 365 (or working days, depending on business model).
Safety Stock: buffer inventory to handle demand variability and lead time variability. Higher safety stock for SKUs with: unpredictable demand (seasonal, fashion items), unreliable suppliers (frequent delays), high cost of stockout (lost regular customers), short shelf life (food items, medicines). Statistical formula: Safety Stock = Z × σ × √Lead Time, where Z is the service level factor (1.65 for 95%, 2.33 for 99%) and σ is standard deviation of demand. Most Indian SMBs use simpler heuristics: 1-2 weeks of average demand as safety stock.
EOQ = √(2 × 1200 × 150 / 50) = √7200 = 85 units. Orders per year: 1200/85 = 14. With 7-day lead time, daily demand 3.3, safety stock 10: ROP = 3.3 × 7 + 10 = 33 units. Total annual cost: ordering 14×150 + holding 85/2×50 = 2,100 + 2,125 = ₹4,225.
EOQ = √(2 × 12000 × 1200 / 120) = √240,000 = 490 units. Orders per year: 12000/490 = 24.5. With 12-day lead time, daily demand 33, safety stock 50: ROP = 33×12 + 50 = 446 units. Optimal to place orders monthly.
EOQ = √(2 × 5,00,000 × 2500 / 15) = √166,66,67 = 12,910 units. Orders/year: 39. Lead time 5 days, daily demand 1,370, safety stock 5,000: ROP = 1,370 × 5 + 5,000 = 11,850 units. Order weekly to keep stock fresh.
EOQ is the ideal order quantity that minimizes combined ordering and holding costs.
Reorder point is the stock level at which you should place a new order: daily demand × lead time + safety stock.
Use higher safety stock when demand is unpredictable or supplier lead time varies. Fast-moving SKUs need tighter monitoring.
Yes for quantity planning. GST valuation, ITC and accounting entries should be handled in your accounting software.
Every business - kirana store, SaaS startup, manufacturing unit - runs on four cycles: cash, inventory, depreciation and financing. Get any one wrong and the business runs out of money before it runs out of opportunity. This calculator addresses one piece of that puzzle the way a CA, CFO or operations manager would actually compute it.
Use it alongside the break-even, business loan, depreciation and inventory calculators to model your unit economics. For Indian businesses the depreciation calculator follows the Companies Act 2013 schedule (SLM and WDV); for financing it follows the same monthly reducing balance that PSU and private banks use.
The Inventory Calculator is part of the Business suite on Online Calculator Tools, alongside 6 related calculators. All tools share the same UI patterns, the same privacy-first rendering (nothing is sent to a server), and the same commitment to showing the formula and assumptions behind every result.
