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ECONOMIC ORDER QUANTITY
(EOQ) CALCULATIONS |
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EOQ = √(2DS/H)
where D=Annual Demand, S=Order Cost, H=Holding Cost per Unit |
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SKU ID |
Product Name |
Unit Cost ($) |
Annual Demand |
Ordering Cost
($/order) |
Holding Cost
Rate |
Holding Cost
($/unit/yr) |
EOQ (units) |
Adjusted EOQ |
Orders per Year |
Order Cycle
(days) |
Annual Order
Cost ($) |
Annual Holding
Cost ($) |
|
SKU-001 |
Titanium Bolt M8x50 |
$2.50 |
45,000 |
$90 |
19.5% |
$0.49 |
4,076 |
4,077 |
11.0 |
22.8 |
$993 |
$994 |
|
SKU-002 |
Hydraulic Cylinder
HC-200 |
$450.00 |
1,200 |
$90 |
19.5% |
$87.75 |
50 |
50 |
24.0 |
10.5 |
$2,160 |
$2,194 |
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SKU-003 |
Ball Bearing
6205-2RS |
$12.00 |
18,000 |
$90 |
19.5% |
$2.34 |
1,177 |
1,177 |
15.3 |
16.5 |
$1,376 |
$1,377 |
|
SKU-004 |
Electric Motor 5HP |
$890.00 |
600 |
$90 |
19.5% |
$173.55 |
25 |
25 |
24.0 |
10.5 |
$2,160 |
$2,169 |
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SKU-005 |
Steel Plate 4x8
1/4in |
$180.00 |
3,500 |
$90 |
19.5% |
$35.10 |
134 |
134 |
26.1 |
9.6 |
$2,351 |
$2,352 |
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SKU-006 |
PLC Controller
S7-1500 |
$2,200.00 |
150 |
$90 |
19.5% |
$429.00 |
8 |
8 |
18.8 |
13.4 |
$1,688 |
$1,716 |
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SKU-007 |
Welding Wire ER70S-6 |
$35.00 |
8,000 |
$90 |
19.5% |
$6.83 |
459 |
460 |
17.4 |
14.5 |
$1,565 |
$1,570 |
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SKU-008 |
Pneumatic Valve
1/2in |
$65.00 |
5,500 |
$90 |
19.5% |
$12.68 |
279 |
280 |
19.6 |
12.8 |
$1,768 |
$1,775 |
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SKU-009 |
Servo Drive ACS580 |
$3,500.00 |
80 |
$90 |
19.5% |
$682.50 |
5 |
5 |
16.0 |
15.8 |
$1,440 |
$1,706 |
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SKU-010 |
Rubber O-Ring Kit |
$8.00 |
25,000 |
$90 |
19.5% |
$1.56 |
1,698 |
1,699 |
14.7 |
17.1 |
$1,324 |
$1,325 |
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SKU-011 |
Conveyor Belt 24in |
$320.00 |
400 |
$90 |
19.5% |
$62.40 |
34 |
34 |
11.8 |
21.4 |
$1,059 |
$1,061 |
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SKU-012 |
Stainless Pipe 2in
Sch40 |
$95.00 |
4,200 |
$90 |
19.5% |
$18.53 |
202 |
203 |
20.7 |
12.2 |
$1,862 |
$1,880 |
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SKU-013 |
Industrial Gearbox
RV-40 |
$1,800.00 |
200 |
$90 |
19.5% |
$351.00 |
10 |
11 |
18.2 |
13.9 |
$1,636 |
$1,931 |
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SKU-014 |
Safety Gloves (pair) |
$4.50 |
36,000 |
$90 |
19.5% |
$0.88 |
2,717 |
2,718 |
13.2 |
19.0 |
$1,192 |
$1,193 |
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SKU-015 |
Lubricant ISO VG 68
(20L) |
$55.00 |
2,400 |
$90 |
19.5% |
$10.73 |
201 |
201 |
11.9 |
21.1 |
$1,075 |
$1,078 |
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SKU-016 |
CNC Spindle Motor
15kW |
$4,800.00 |
50 |
$90 |
19.5% |
$936.00 |
3 |
4 |
12.5 |
20.2 |
$1,125 |
$1,872 |
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SKU-017 |
Cable Tray 12x4
(10ft) |
$28.00 |
6,500 |
$90 |
19.5% |
$5.46 |
463 |
463 |
14.0 |
18.0 |
$1,263 |
$1,264 |
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SKU-018 |
Thermal Sensor PT100 |
$42.00 |
3,000 |
$90 |
19.5% |
$8.19 |
257 |
257 |
11.7 |
21.6 |
$1,051 |
$1,052 |
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SKU-019 |
Air Filter Element
AF-250 |
$18.00 |
12,000 |
$90 |
19.5% |
$3.51 |
784 |
785 |
15.3 |
16.5 |
$1,376 |
$1,378 |
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SKU-020 |
VFD Drive 10HP |
$1,500.00 |
120 |
$90 |
19.5% |
$292.50 |
9 |
9 |
13.3 |
18.9 |
$1,200 |
$1,316 |
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TOTALS / AVERAGES |
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171,900 |
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12,591 |
12,600 |
16.5 |
16.3 |
$29,664 |
$31,202 |
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Total Annual Inventory
Cost (Ordering + Holding): |
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$60,866 |
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Note: EOQ assumes
constant demand and lead time. Adjusted EOQ considers minimum order
quantities. |
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