EOQ Formula with examples in Excel (Economic Order Quantity for Inventory Management)

Download the EOQ Excel Calculator: https://abcsupplychain.com/download-w...

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INVENTORY MANAGEMENT WORKSHOP (FREE) : https://abcsupplychain.com/inventory-...

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How much and how often should I order my stock? 📦 🤷‍♂️
These simple questions can have dramatic consequences on the profit & cash flow of your company ⚠️ 💥 However, I can still see 2 common mistakes:

1) Underestimating the inventory & holding costs 💰: cost of money, storage, insurance, inventory gap, theft, promotion, destruction...
Buying more to optimize your purchasing price or fill your container is not always profitable in the long run 📉

2) Underestimating the transaction costs 🥵: Too many small orders, too much work, emails, follow-up, inspection, storage, payment, issues...

In this new step-by-step video tutorial, I explain:
👉 Calculate the Holding & Inventory Costs
👉 Calculate your Transaction costs per order
👉 Use the Economic Order Quantity (EOQ) formula to find the balance point ⚖️
👉 Example with NIKE shoes 👟 in EXCEL that you can download below the video :-)
👉 What are the limitations of the EOQ method
👉 How to combine EOQ with Safety Stock
👉 The action plan to start optimizing your inventory TODAY 🚀

And let me know in the comments, what you think of the EOQ method and its limitations.

Enjoy my tutorial !
Edouard Thieuleux

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Economic Order Quantity Calculation:

00:00 EOQ Introduction
00:46 Wilson formula: background
01:24 EOQ formula: meaning and definition
02:13 Demand (forecast)
02:31 Holding Costs
03:57 Transaction Costs
05:24 EOQ calculation and Order Frequency
6:45 EOQ in Excel with examples (full tutorial)
9:19 Limits of the EOQ formula
11:21 EOQ, Reorder Point and Safety Stock
12:03 EOQ for Inventory Management: Action Plan

#supplychain #inventorymanagement #eoq