Oracle Fusion EOQ and Fixed Lot Multiple Calculator
The economic order quantity balances ordering cost against holding cost. In Oracle Fusion planning you then express the answer through item order modifiers such as a fixed lot multiple or minimum order quantity. This calculator gives the optimum and the cost of rounding it to a real pack size.
Your numbers
Buyer time, receiving, invoice matching and freight per order, not item price.
Capital, storage, insurance and obsolescence as a share of unit cost.
Supplier pallet, case or standard pack quantity.
Your results
Classic EOQ assumes constant demand, instant replenishment and no quantity discounts. Treat the result as a starting point.
EOQ and rounded lot vs cost per order
Sweeps Cost per order from 10 to 300, holding your other inputs fixed.
Review order modifiers across your item master
Optional expert review of lot size and order modifier settings against your real cost and demand data.
Optional. The tool and every export work without this. No spam.
How to use it
Enter yearly demand, the fully loaded cost of placing one order, the unit cost and an annual holding rate. Most companies use 15% to 30% for holding. Then enter the supplier pack size or pallet quantity. The tool returns the pure EOQ, the lot rounded up to a whole multiple, orders per year and the cost penalty from rounding. If the penalty is small, set the rounded lot as the order modifier on the item. If it is large, negotiate a smaller pack or consolidate orders across items.
The math
EOQ equals the square root of two times demand times order cost, divided by holding cost per unit. Total annual cost is orders per year times order cost plus average inventory, half the lot, times holding cost per unit. At the true EOQ the two cost parts are equal, and total cost is flat near the optimum, so rounding by 10% to 20% costs very little. Rounding by 100% or more can matter. The calculator shows both numbers so you can judge it.
- EOQ = sqrt(2 x D x S / H)
- H = unit cost x holding rate
- Annual cost = (D / Q) x S + (Q / 2) x H
Common mistakes
People often put the item price in the order cost field, or use a holding rate that omits capital cost. Others forget that EOQ ignores volume discounts, shelf life and storage limits. For perishable or high-obsolescence items, cap the lot at a few weeks of demand regardless of the formula. In a planning system, also remember a minimum order quantity and a fixed lot multiple interact: the system first applies the minimum, then rounds up to the multiple.
Frequently Asked Questions
Should I use EOQ for every item?
No. EOQ suits stable, independent demand with meaningful ordering cost. For dependent demand in MRP, lot-for-lot or period-of-supply sizing is often better, and for tiny or very cheap items a simple min-max rule is enough.
What holding rate should I use?
Add your cost of capital, storage and handling, insurance, shrinkage and obsolescence. Between 15% and 30% of unit cost per year is common in manufacturing. Use a higher figure for electronics or items that age quickly.
What does the cost of rounding mean?
It is the extra annual ordering plus holding cost you pay because supply comes only in whole multiples. A small figure means the pack size is not a problem. A large figure suggests negotiating pack size or order frequency.
How do minimum order quantity and lot multiple combine?
Generally the quantity is first raised to the minimum, then rounded up to the next whole multiple. This tool enforces at least one multiple. If you also have a minimum, take the larger of that and the result shown.
If you want lot sizes recalculated across thousands of items from your Oracle cost and demand data, we can build that review as an optional project. The calculator stands alone.
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