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
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
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
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
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
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.