Formula for Economic Order Quantity(EOQ) :

Economic Order Quantity(EOQ) is derived from a below formula that consists of annual demand, holding cost, and order cost. This formula aims at striking a balance between the amount you sell and the amount you spend to manage your inventory.

Economic Order Quantity (EOQ) =  (2 × D × S / H)

( or )

Economic Order Quantity (EOQ) = (2 × D × S / H) ^1/2

Where,

D - Annual demand (in units)

S - Cost of ordering per order

H - Carrying/holding cost per unit per year.

Expected time between Orders Formula :

This formula is used to finds the expected period of time between your orders.

Expected time between Orders (T) = Number Of Working Days per Year / Orders per year

Example :

Number of Working days per year = 250 days , Orders per year = 5

Expected time between Orders (T) = 250 / 5

Expected time between Orders (T) = 50 days between orders.