CCalclabhub

A Reorder Point Calculator

A reorder point is the inventory level at which you place the next order. Set it too low and you stock out before the delivery lands; set it too high and you tie up cash in shelves.

Reorder point

480

Safety stock in units
200
Demand during the lead time
280
Days of cover at the trigger
12
Orders per year at this trigger
30.4167

Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.

The formula this calculator uses

reorder point = daily usage x lead time + safety stock

daily usage
Average units sold or consumed per day
lead time
Days between placing an order and receiving it
safety stock
Extra units held to absorb faster-than-average demand
reorder point
The stock level that triggers the next order

How to check the result by hand

  1. 1

    Measure average daily usage

    Total units sold over a representative period divided by the days in it. Forty units a day is the default, and using a whole year smooths out short-term noise.

  2. 2

    Find the real supplier lead time

    Use the observed average from receipt records, not the figure the supplier advertises. Seven days is typical for a domestic wholesaler, and a day of slippage is common.

  3. 3

    Multiply to get lead time demand

    Forty units a day across seven days is two hundred and eighty units. This is the stock you must not fall below before the delivery arrives.

  4. 4

    Add safety stock

    Five days of cover at forty a day adds two hundred units. The reorder point becomes four hundred and eighty, giving twelve days of cover in total.

  5. 5

    Set the trigger and review it

    Enter four hundred and eighty as the reorder point in your stock system and recheck it whenever demand or lead time shifts, at least once a quarter.

For worked examples, common mistakes and the limits of this formula, read the full How To Calculate A Reorder Point page.