Inventory Calculator

Instantly estimate your Economic Order Quantity (EOQ), Reorder Points, and map out your inventory cost efficiency.

Qty
0 100k
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$
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1% 100%

Supply Chain & Financials (Optional)

Days
0 365
Qty
0 10k
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Economic Order Quantity (EOQ)
0 Units
The optimal number of units to order to minimize total costs.
Reorder Point
0 Units
Inventory level triggering a new order
Total Annual Cost
$0
Combined Ordering & Holding Costs
Cost of Goods Sold
$0
COGS based on Beg + Purchases - End
Inventory Turnover
0.00
Times inventory is sold per year
Days Sales of Inventory (DSI)
0 Days
Average time it takes to convert your inventory into sales.

Order Quantity Simulator

Compare the optimal Economic Order Quantity (EOQ) against an alternative custom order size to see the financial impact.

Annual Cost Breakdown

Financial Flow Breakdown

Saved Inventory Scenarios

Store your custom inventory scenarios securely in your local browser environment. Re-load and map alternate profiles instantly.

Scenario Label Demand & Cost Optimal EOQ Reorder Point Total COGS Actions
No saved scenarios in this browser. Configure your inventory parameters above and click "Save Scenario".

1. The Mechanics of Economic Order Quantity (EOQ)

The EOQ formula is a fundamental piece of supply chain management. It determines the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. Managing these variables prevents excessive cash lock-up in warehouses.

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2. Combating Stockouts with Reorder Points

A Reorder Point ensures you never run out of critical goods. By factoring in your lead time (how long it takes a supplier to deliver) and your safety stock (the buffer to protect against demand spikes), you can dynamically trigger purchasing orders right before inventory depletes.

3. Optimizing Cash Flows via Inventory Turnover

Inventory Turnover Ratio and Days Sales of Inventory (DSI) are powerful financial metrics. A high turnover indicates strong sales and efficient operational management, while a low ratio suggests overstocking, obsolescence, or deficiencies in product marketing.

Frequently Asked Questions

What is a good Inventory Turnover Ratio?

A "good" ratio varies heavily by industry. Grocery stores have very high turnover (10-20 times per year) due to perishable goods, while heavy machinery or luxury retail might have a turnover of 2-4. Generally, a higher ratio implies better liquidity.

How do I determine my Holding Cost percentage?

Holding costs (or carrying costs) typically include storage space, insurance, depreciation, obsolescence, and opportunity cost of capital. Usually, businesses estimate this between 15% and 25% of the inventory value annually.

Why is Safety Stock necessary?

Safety stock acts as an insurance policy against supply chain delays and sudden spikes in consumer demand. Without it, standard deviations in lead time can lead to catastrophic stockouts and lost revenue.