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Orders / Year

The alternative to calculating a part's EOQ using Wilson's formula, is to use the number of Orders / year for that part. This calculation is much simpler and can be done by entering the number of orders per year under the Create tab, which will make the part's EOQ simply the Annual volume divided by this value.

Example

Annual volume: 2000 pcs.
Orders / year 5

EOQ = 2000/5 = 400 pcs.

If you do not enter any Orders / year, the system will calculate the EOQ using Wilson's formula. If you do not enter any ordering costs, the system will calculate the EOQ using only the number of Orders / year as a basis.

If you have entered both an ordering cost and an orders / year quantity, the system will perform both calculations, and in this case the orders / year quantity is used as a minimum value for the EOQ. In other words, if Wilson's formula calculates an EOQ of 55 pcs, and the number of orders / year gives an EOQ of 75 pcs, the system sets the EOQ to 75 pcs.