Period Order Quantity (POQ) Calculator
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.
Your numbers
Capital, storage, insurance and obsolescence as a percentage of unit cost.
Your results
Assumes steady demand. In a real MRP run the order covers the actual net requirements in the interval, which varies from period to period.
POQ interval as order cost changes
Sweeps Cost per order or setup from 10 to 600, holding your other inputs fixed.
Lot size review across your items
Optional: we can compare configured lot sizing rules with calculated values for your top items.
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How to use it
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
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.
- EOQ gives a quantity, POQ gives a time interval.
- Always round to whole planning periods.
- Carrying rate should include obsolescence risk.
Worked example
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
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.
Frequently Asked Questions
What is the difference between EOQ and POQ?
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?
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?
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?
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.
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.
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Keep exploring
Free tools
- NetSuite Economic Order Quantity CalculatorFind the order quantity that minimizes ordering plus holding cost and compare it with the quantity you buy today.
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ERP fixes and how-tos
- SyteLine posting out of current period: causes and a safe fixSyteLine rejects a posting when the transaction date falls outside an open accounting period. Here is how to check period status, dates and sites, and fix it safely.
- How to close job costing and the accounting period in EpicorChecklist for closing a job costing period in Epicor Kinetic: capturing labor and burden, WIP reconciliation, job closing, and GL period close sequencing.
- How to Run Period End Close in M3How Infor M3 period end close actually runs across inventory, purchasing, sales and the general ledger, with the checklist order that avoids reopening a closed period.
Guides
- How to Fix SyteLine Inventory Quantity MismatchesResolve SyteLine inventory quantity mismatches between physical counts and system records. Covers on-hand discrepancies, costing errors, and reconciliation steps.
- SyteLine Period Close Checklist and Best Practices GuideExecute month-end and year-end close in Infor SyteLine with a detailed checklist covering subledger reconciliation, accruals, GL close, and reporting.
- How to Run Financial Period Close in SyteLineStep-by-step guide to running financial period close in Infor SyteLine. Learn month-end procedures, GL reconciliation, period locking, and year-end closing processes.