30  EOQ Interactive Model

Economic Order Quantity

Explore how demand, ordering cost, and holding cost affect EOQ.

viewof D = Inputs.range(
  [100, 5000],
  {
    value: 1200,
    step: 100,
    label: "Annual demand (D)"
  }
)

viewof S = Inputs.range(
  [5, 200],
  {
    value: 50,
    step: 5,
    label: "Ordering cost (S)"
  }
)

viewof H = Inputs.range(
  [1, 30],
  {
    value: 5,
    step: 1,
    label: "Annual holding cost (H)"
  }
)

Qstar = Math.sqrt((2 * D * S) / H)

orderingCost =
  (D / Qstar) * S

holdingCost =
  (Qstar / 2) * H

totalCost =
  orderingCost + holdingCost

html`
<div class="eoq-formula">
Q* = √(2DS / H)
</div>

<div class="eoq-metrics">

  <div class="eoq-metric">
    <div class="eoq-number">
      ${Qstar.toFixed(1)}
    </div>
    <div class="eoq-label">
      Optimal order quantity
    </div>
  </div>

  <div class="eoq-metric">
    <div class="eoq-number">
      ${orderingCost.toFixed(0)}
    </div>
    <div class="eoq-label">
      Ordering cost
    </div>
  </div>

  <div class="eoq-metric">
    <div class="eoq-number">
      ${totalCost.toFixed(0)}
    </div>
    <div class="eoq-label">
      Total relevant cost
    </div>
  </div>

</div>
`

quantities =
  Array.from(
    {length: 200},
    (_, i) => 10 + i * 10
  )

costData =
  quantities.map(Q => ({
    Q: Q,

    ordering:
      (D / Q) * S,

    holding:
      (Q / 2) * H,

    total:
      (D / Q) * S +
      (Q / 2) * H
  }))

Plot.plot({

  height: 400,

  x: {
    label: "Order quantity Q"
  },

  y: {
    label: "Annual cost",
    grid: true
  },

  marks: [

    Plot.line(
      costData,
      {
        x: "Q",
        y: "ordering"
      }
    ),

    Plot.line(
      costData,
      {
        x: "Q",
        y: "holding"
      }
    ),

    Plot.line(
      costData,
      {
        x: "Q",
        y: "total",
        strokeWidth: 3
      }
    ),

    Plot.ruleX(
      [Qstar]
    ),

    Plot.dot(
      [{
        Q: Qstar,
        cost: totalCost
      }],
      {
        x: "Q",
        y: "cost",
        r: 6
      }
    )
  ]
})