EOQ = √(2·D·K / h) - order-size that minimises total ordering + holding cost for a spare.
Formula
$$ EOQ = \sqrt{\frac{2 D K}{h}} $$
Symbol legend
| Symbol | Meaning | Unit | Source |
|---|---|---|---|
| $D$ | Annual demand | units | maintenance history |
| $K$ | Order setup cost | USD | procurement |
| $h$ | Holding cost per unit per year | USD | inventory policy |
Sources
- Wilson (1934) - Scientific routine for stock control.