# Period Order Quantity (POQ) Calculator

> Source: https://netray.co/tools/period-order-quantity-poq-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Convert an economic order quantity into a period order quantity, so each order covers a whole number of weeks of demand.

## Category

supply-chain

## Audience

- Material planner
- Inventory analyst
- Buyer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Annual demand

**Key:** annual_demand

**Type:** number

**Default:** 26000

**Min:** 0

**Step:** 100

**Unit:** units

#### Planning weeks per year

**Key:** weeks

**Type:** number

**Default:** 52

**Min:** 1

**Max:** 60

**Step:** 1

**Unit:** weeks

#### Cost per order or setup

**Key:** setup

**Type:** number

**Default:** 120

**Min:** 0

**Step:** 5

**Unit:** $

#### Unit cost

**Key:** unit_cost

**Type:** number

**Default:** 14

**Min:** 0

**Step:** 0.5

**Unit:** $

#### Annual carrying cost rate

**Key:** carry

**Type:** number

**Default:** 22

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

**Help:** Capital, storage, insurance and obsolescence as a percentage of unit cost.

**Outputs:**

#### Average weekly demand

**Key:** weekly

**Expr:** annual_demand / weeks

**Format:** number

#### Economic order quantity

**Key:** eoq

**Expr:** sqrt(2 * annual_demand * setup / (unit_cost * carry / 100))

**Format:** integer

**Description:** Classic square root formula.

#### Period order quantity interval

**Key:** poq

**Expr:** max(1, round(eoq / weekly))

**Format:** weeks

**Primary:** true

**Description:** EOQ divided by weekly demand, rounded to whole weeks.

#### Typical order quantity

**Key:** qty

**Expr:** poq * weekly

**Format:** integer

**Primary:** true

**Description:** Average units covered by one order at this interval.

#### Orders per year

**Key:** orders

**Expr:** weeks / poq

**Format:** decimal

#### Annual ordering plus carrying cost

**Key:** total

**Expr:** orders * setup + qty / 2 * unit_cost * carry / 100

**Format:** currency

**Chart:**

#### POQ interval as order cost changes

**Type:** line

**X:** setup

**From:** 10

**To:** 600

**Steps:** 30

**Series:**

- poq

**Disclaimer:** Assumes steady demand. In a real MRP run the order covers the actual net requirements in the interval, which varies from period to period.

## Content

**Intro:** Period order quantity is a lot sizing rule that orders enough to cover a fixed number of periods of demand. This calculator derives the interval from the economic order quantity and shows what it costs.

**Sections:**

#### How to use it

**Body:** Enter annual demand, the cost to place or set up an order, the unit cost and your carrying rate. The calculator finds the EOQ, divides by average weekly demand, and rounds to a whole number of weeks. That interval is the POQ you would enter as the lot size period in your planning parameters. Try the setup cost chart to see how the interval stretches when ordering is expensive.

#### The method

**Body:** EOQ equals the square root of two times annual demand times order cost, divided by unit cost times carrying rate. The POQ then equals EOQ divided by average demand per period. Unlike EOQ, a POQ order covers the actual net requirements across the interval, so quantity follows the demand pattern. This makes it a good fit for lumpy dependent demand, where a fixed quantity would either leave stock behind or run short.

**Bullets:**

- EOQ gives a quantity, POQ gives a time interval.
- Always round to whole planning periods.
- Carrying rate should include obsolescence risk.

#### Worked example

**Body:** At 26,000 units a year, a 120 dollar order cost, 14 dollar unit cost and 22 percent carrying rate, the EOQ is about 1,424 units. Weekly demand is 500, so the POQ is 3 weeks and an order covers about 1,500 units. That means roughly 17 orders a year. If order cost doubles, the interval moves to 4 weeks. Use the result as a starting point and compare against supplier minimums and packaging.

#### Common mistakes

**Body:** Using POQ on items with erratic or declining demand can create excess stock, because the interval is based on the average. Another error is ignoring supplier order multiples and minimums that override the calculated quantity. Review POQ settings when demand changes by more than a quarter, and revisit the cost inputs when freight or setup practices change.

**Cta:** Netray can compare the lot size rule set in your ERP with the calculated optimum across your whole item base, using read-only queries on your own data.

**Faq:**

#### What is the difference between EOQ and POQ?

**Answer:** EOQ is a fixed quantity per order. POQ is a fixed time interval, and the quantity equals the net requirements inside that interval. POQ adapts to demand changes, while EOQ keeps the quantity constant.

#### When is POQ better than lot for lot?

**Answer:** When ordering or setup cost is significant and demand is steady enough to group. Lot for lot minimizes inventory but maximizes the number of orders, which is costly when each order carries a high fixed cost.

#### Which ERP settings correspond to POQ?

**Answer:** Most ERPs have a period based lot sizing procedure, such as weekly or monthly lot sizing, with a number of periods to group. Names differ by system, so check your planning parameter documentation.

#### How often should I recalculate POQ?

**Answer:** Review it when demand, order cost or carrying cost shift noticeably, and at least annually for A items. Stable low value items can be reviewed less often.

## Search terms

period order quantity calculator, poq lot sizing, poq formula, fixed period requirements lot size, eoq to poq conversion, lot sizing techniques mrp, period order quantity example, order interval calculator

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