Production batch size calculator

Methodology

This is the economic production quantity, not the classic economic order quantity: it assumes units are produced over time rather than arriving all at once, so stock builds only at the difference between the production rate and the demand rate. Economic batch quantity = the square root of (two × annual demand × setup cost per run ÷ (unit cost × holding cost rate)), divided by the square root of one minus demand rate ÷ production rate. Maximum inventory is lower than the batch size for the same reason — some of the batch is consumed while the rest is still being made. The recommended batch size is the larger of the economic quantity and any minimum batch size you are forced into by tooling, a supplier minimum or a process constraint, and the cost penalty shows what that constraint costs per year. Annual setup cost = runs per year × setup cost. Annual holding cost = average inventory × unit cost × holding rate. Excluded: quantity discounts, shelf life and obsolescence, capacity feasibility (a mathematically optimal batch can still not fit the schedule), demand variability, multi-product changeover sequencing, and the working capital consequence of a long run. The result is sensitive to the setup cost and holding rate you assume; treat it as a starting point for a discussion, not an answer. You supply every input: this site holds no factory cost data, capacity figures, yields, cycle times or industry benchmarks, and never estimates them for you. Results are an orientation model for structuring a decision, not an industrial engineering study, a quotation, or safety, engineering or financial advice. Confirm equipment capability, staffing, process capability and cost with your own measurements before relying on them.