SyteLine EOQ and Lot Size Calculator
Lot size is one of the most influential parameters on a SyteLine item, driving how many jobs and purchase orders MRP creates. This calculator finds the economic order quantity and shows what your current lot size costs per year.
Your numbers
Setup labor and machine time, PO handling, receiving and inspection per lot.
Capital, storage, insurance and obsolescence as a share of unit cost.
Your results
Classic EOQ assumes steady demand and no quantity discounts. Treat the result as a starting point for lot size rules, then apply supplier minimums and shelf life limits.
EOQ vs cost per order or setup
Sweeps Cost per order or setup from 10 to 300, holding your other inputs fixed.
Lot size review across your item master
Optional: we can run this analysis on your own data and send back a short list of items worth changing.
Optional. The tool and every export work without this. No spam.
How to use it
Enter annual demand, the true cost of a setup or purchase order, unit cost and your carrying rate. Then enter the lot size currently used on the item. The tool returns the EOQ, how often you would order at that size and the annual saving. The setup cost is the number people underestimate, so include machine downtime, first piece inspection, receiving and invoice matching, not only the buyer's time.
- Use standard cost for unit cost, not the latest PO price
- Carrying rates of 15 to 30% are typical for manufacturers
- Test both low and high setup cost to see sensitivity
The formula
EOQ equals the square root of two times annual demand times setup cost divided by annual holding cost per unit. Total annual cost is ordering cost, demand divided by lot size times setup cost, plus holding cost, half the lot size times holding cost. The curve is flat near the optimum, so lots within 20% of EOQ cost only a few percent more. That is why rounding to pack sizes or order multiples is usually fine.
Applying it in SyteLine
Use the result to inform the item lot size, minimum order and order multiple settings, then let MRP or APS honor them. Do not use EOQ for items with firm demand lumps, short shelf life, make to order parts or heavy volume discounts. For purchased items, compare the saving with the price break you would give up. A saving of a few dollars per item per year only matters if you multiply it across hundreds of items.
- Check supplier minimums and truckload economics first
- Cap lots by shelf life or tooling life
- Review annually when demand or setup times change
Frequently Asked Questions
Is EOQ valid for manufactured items?
Yes, the same logic applies with setup cost replacing order cost. For production, also consider the economic production quantity if the line produces while it is consuming, but EOQ is a reasonable first pass.
How do I estimate setup cost?
Multiply setup hours by the loaded work center rate and add scrap during changeover, inspection time and any admin cost per job. Use the job routing setup hours as a starting point.
Why is my saving small?
Because the EOQ cost curve is flat. If your current lot is already within a reasonable range of the optimum, the saving will be minor and other levers matter more.
Should I always order exactly EOQ?
No. Round to pack size, pallet or tool capacity. The cost of being slightly off is small, while awkward quantities create handling problems.
If you want lot sizes reviewed across your whole item master using real setup times and demand from SyteLine, we can build that analysis for you.
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