Free tool
Reorder point calculator
Find the stock level that should trigger your next order, with the demand and buffer shown separately.
Your demand and buffer
Reorder point
386 units
- Demand during lead time
- 280 units
- Safety stock
- 106 units
Order when your inventory position reaches this point. Inventory position counts on-hand plus on-order stock, less committed demand.
The formula
Reorder point = average daily demand × lead time + safety stock
- Daily demand
- Average units sold or used per day.
- Lead time
- Days from placing an order until stock is available.
- Safety stock
- Extra units kept to cover demand and lead-time variation.
Worked example
- An item sells 20 units a day and takes 14 days to arrive.
- Expected lead-time demand is 20 × 14 = 280 units.
- Add 106 units of safety stock: 280 + 106 = 386 units.
When it applies
- Products ordered whenever inventory position falls to a trigger level.
- Products with a known lead time and a safety-stock estimate.
When it breaks down
- A flat average misses seasonal demand and promotions.
- A changing supplier lead time makes a fixed trigger stale.
Common mistakes
Leaving out on-order stock
Compare the trigger with inventory position, not only units on the shelf, so an open order does not trigger another.
Counting safety stock twice
The buffer is added once after expected lead-time demand.
Mixing units of time
Daily demand needs lead time in days. Convert weekly demand before multiplying.
Questions
What is a reorder point?
It is the inventory position at which you place a replenishment order.
What is the reorder point formula?
Average daily demand times lead time in days, plus safety stock.
Does reorder point include safety stock?
Yes. Safety stock is the buffer above the demand you expect during lead time.
Is reorder point the same as order quantity?
No. The point says when to buy; order quantity says how many units to buy.
Can lead time be zero?
Yes. Expected demand during lead time is then zero, so the reorder point equals safety stock.
Related
Published by Skuvelo. Results are estimates computed from the figures you enter, not a reading of your own sales or stock.
A calculator answers once. Skuvelo keeps answering.
This tool computes one number from what you type. Skuvelo computes it continuously, for every SKU, from your own sales and stock.