Reorder Point Calculator estimates the inventory level that should trigger a replenishment order. Choose a known safety stock, a simple maximum-usage method, or a statistical service-level method, then compare the reorder point with your current inventory position.
Enter inventory assumptions
Reorder point formula
Where ROP is the reorder point in units, d is average daily demand, L is average replenishment lead time in days, and SS is safety stock. The product d × L is expected demand during lead time.
Compare inventory position—not only shelf stock—with the reorder point. Place an order when inventory position is at or below the trigger.
How the three safety stock methods work
1. Known safety stock
Use this method when your company already has an approved buffer stock for the item. The calculator adds that quantity to expected lead-time demand. This is useful when safety stock comes from an ERP policy, supplier agreement, service-level study, or management rule.
2. Maximum usage and lead time
The simple method estimates safety stock as (maximum daily demand × maximum lead time) − (average daily demand × average lead time). It is easy to explain and works when you have reliable observed maximums, but one unusual peak can make the buffer too large. Review the historical period and exclude obvious data errors.
3. Statistical demand variability
When lead time is reasonably stable, safety stock can be estimated as Z × σd × √L. Here Z is the normal-distribution service factor, σd is the standard deviation of daily demand, and L is lead time. A higher service target creates more safety stock. The method does not remove stockout risk and is less suitable for strongly seasonal or intermittent demand.
Worked reorder point example
Suppose an item sells 20 units per day, average supplier lead time is 7 days, and the business carries 50 units of safety stock. Expected lead-time demand is 20 × 7 = 140 units. The reorder point is therefore 140 + 50 = 190 units. If 250 units are on hand, none are on order, and none are allocated, the inventory position is 250 units—60 units above the trigger. At the current average demand, the trigger is about three days away.
| Example measure | Calculation | Result |
|---|---|---|
| Lead-time demand | 20 × 7 | 140 units |
| Safety stock | Known buffer | 50 units |
| Reorder point | 140 + 50 | 190 units |
| Days until trigger | (250 − 190) ÷ 20 | 3 days |
Reorder point versus order quantity
The reorder point answers when to order. It does not automatically answer how much to order. This calculator provides a planning quantity based on your target days of stock coverage, but the final purchase quantity may need to respect supplier minimums, case packs, storage capacity, expiry dates, cash limits, and planned promotions. Economic order quantity is a separate model that balances ordering and holding costs.
How to use reorder points well
- Use demand and lead-time figures from a representative period.
- Update fast-moving or seasonal items more often than stable items.
- Include open purchase orders and committed customer quantities in inventory position.
- Measure actual supplier lead time from order placement until goods are available for sale or production.
- Round the trigger to a practical pack size when suppliers ship in cases or pallets.
- Test the result against recent stockouts, service levels, and excess inventory.
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Frequently asked questions
What is a reorder point?
It is the inventory position that triggers a replenishment order so expected demand during supplier lead time can be covered, with safety stock added for uncertainty.
Should I compare on-hand stock or inventory position with the reorder point?
Use inventory position: on-hand units plus units already on order, minus allocated or backordered units. Looking only at shelf stock can cause duplicate orders or hide committed demand.
Is safety stock included in the reorder point?
Yes. The standard formula adds safety stock to expected demand during the replenishment lead time.
How often should I recalculate a reorder point?
Review it whenever demand, seasonality, supplier lead time, service targets, or product availability changes materially. Important fast-moving items may need monthly or even weekly review.
Is reorder point the same as minimum stock?
Not always. Minimum stock may refer only to a safety buffer, while the reorder point usually includes both lead-time demand and safety stock.