# EOQ with Quantity Discounts

## EOQ with Quantity Discount Formula

The economic order quantity formula is:EOQ = √ (2DS) / (IC)

where,D is the Demand of the product per unit of time

S is the cost of placing the order

I represents annual inventory holding cost as percent of item total cost

C is unit cost of the item

**Note that D and H must be for the same period of time (i.e. months, years, etc).

## What is Economic Order Quantity with Quantity Discounts

When considering quantity discounts to determine the EOQ, it is essentially the same formula, but rather than H (holding cost) you evaluate the cost of the item (C) and multiply it by the inventory holding cost of the item as a percent of the cost on an annual basis.