How to use EOQ& Tiered Volume Discount Optimizer
- Enter Annual purchasing demand (Units/year) and adjust the options as needed.
- Run the tool and inspect its results, evidence and limitations.
- Copy or download the result, then verify it against the actual website, source data or business records.
Try a concrete example
For 12000 units demand and $350 order cost, ordering 5000 units at $8.50 achieves the lowest total cost ($106037/yr), saving $21695 over 1000-unit batches.
How to interpret results
Applies all-units quantity discount EOQ models balancing volume purchase discounts, shipping overhead and inventory holding expenses.
Frequently asked questions
What is EOQ and the all-units volume discount model?
EOQ balances fixed ordering fees against holding expenses. In an all-units discount model, meeting a tier threshold applies the discounted unit price to all purchased units in the order batch.
Why is ordering maximum quantities for the lowest price risky?
Excessive batch sizes balloon inventory carrying costs, tied-up working capital and warehouse fees. Discounts must demonstrably exceed incremental holding expenses to create value.
What expenses comprise the fixed order cost in international trade?
International B2B ordering costs include ocean bill of lading fees, customs brokerage, export documentation, third-party inspection and port terminal charges (~ per shipment).
What is a typical inventory carrying cost percentage?
Manufacturing and trade sectors use 12%~25% of goods value annually, covering credit interest (4%~8%), warehouse rent/handling (3%~6%), insurance, obsolescence and depreciation.
How does the algorithm determine the global optimal order tier?
The algorithm computes unconstrained EOQ for each tier, adjusts to price-break thresholds if necessary, and evaluates total annual expenditure (acquisition + ordering + holding). The lowest total cost defines the global optimum.