Reorder Point Calculator

The stock level at which to place the order so the goods arrive before you run out. It is what gets consumed during the lead time, plus the buffer.

Currency and number format for

Reorder point

—

Reorder point—

Consumption during the lead time—

Safety stock—

Days the buffer covers—

Lead time—

Without a buffer it would be—

How this was worked out

The formula

Reorder point = daily demand × lead time + safety stock

What it means

When you place an order, the warehouse keeps selling while you wait. The reorder point is how much has to be left at that moment for stock to last exactly until the replenishment arrives. Since demand over those days will not be exactly average, safety stock is added on top: without it you would fall short half the time, by the definition of an average.

How to work it out by hand

Work out your average daily demand
Multiply it by the days the supplier takes
Add whatever safety stock you have decided on
When the warehouse drops to that figure, place the order

What is worth knowing

If the lead time is longer than one full order lasts, the reorder point comes out above what fits in the warehouse, and that is not a calculation error: it means you need more than one order in transit at once. It is also worth revisiting when seasonality shifts: a reorder point worked out from January demand leaves the warehouse empty during the December rush.

Frequently asked questions

What if the reorder point is bigger than my order size?

It means you need more than one order in transit at the same time. That is normal with long lead times.

How often should I recalculate it?

Whenever average demand or the supplier's lead time changes. With marked seasonality, at least every season.

Can I skip safety stock?

You can, and then you will run out half the time: real demand sits above the average exactly half the time.

Does stock already on order count?

Yes. What you compare against the reorder point is inventory position: what you hold plus what is in transit.

Does it work with very irregular demand?

Less well. With lumpy demand, periodic review works better than a continuous reorder point.