Inventory reorder point calculator
The reorder point is the inventory level where you should buy again so you do not run out before the next delivery arrives. With daily demand, supplier lead time, and your safety stock, the calculator tells you when to reorder, how many units to order, and how many days of coverage you have left.
With 25 units of daily demand, a 7-day lead time, and 50 units of safety stock:
- Lead-time demand: 175 units
- Reorder point: 225 units
- Current stock of 180 → time to reorder (coverage of 7.2 days)
- Suggested order (30-day coverage): 620 units → final stock 800
Formulas
Lead-time demand = Daily demand × Lead time
Reorder point = Lead-time demand + Safety stock
Suggested order = Daily demand × Target coverage days + Safety stock − Current stock
Step-by-step example (calculator defaults)
- Daily demand = 25 units; lead time = 7 days.
- Lead-time demand = 25 × 7 = 175 units.
- Safety stock = 50 units → reorder point = 175 + 50 = 225.
- Comparison: with 180 units in stock (≤ 225), the calculator flags reorder; current coverage is 180 / 25 = 7.2 days.
- Suggested order for 30 days of coverage: 25 × 30 + 50 − 180 = 620 units; after the order you would hold 800.
Scenario table (same engine logic)
| Demand/day | Lead time | Safety | Current | Reorder point | Suggested order | Final stock |
|---|---|---|---|---|---|---|
| 25 | 7 days | 50 | 180 | 225 | 620 | 800 |
| 25 | 7 days | 50 | 250 | 225 | 550 | 800 |
| 40 | 10 days | 100 | 300 | 500 | 1,000 | 1,300 |
| 15 | 5 days | 30 | 120 | 105 | 360 | 480 |
| 60 | 15 days | 200 | 700 | 1,100 | 2,200 | 2,900 |
Interpreting the result
- The reorder point is not the order quantity: it is the signal for when to buy. The quantity depends on your target coverage, cash flow, and volume discounts.
- If your supplier is often late, use the longest lead time observed and raise safety stock; both increase the reorder point. For chronic delays, consider a second supplier for critical items.
- Demand changes by SKU: calculate fast-moving, slow-moving, and seasonal products separately so you neither overbuy nor run out.
- Common mistakes: using monthly demand as if it were daily, forgetting safety stock in high season, and not recalculating after promotions or supplier changes.
This calculator assumes steady demand and lead times. If your demand swings day to day, compensate with higher safety stock (use the average of recent weeks as daily demand). The model does not include storage costs or stockout costs; adjust coverage to your real operation.
Frequently asked questions
It is the stock level where you should place a new order to cover demand during lead time plus safety stock. With the defaults: 25 × 7 + 50 = 225 units.
Use extra units to cover delays, above-average demand, or unstable suppliers. Review it against recent sales history and raise it in high season.
Increase safety stock or the lead time used in the calculation: both raise the reorder point and protect against delays. If delays are chronic, look for a second supplier.
Weekly for fast-moving products, and after promotions, seasonal shifts, or supplier changes. Slow-moving items can be reviewed monthly.
Related calculators
- Cost per unit: what each unit costs you including waste
- Profit margin: how much profit each sold unit leaves
- Break-even point: how many units cover your fixed costs
- Monthly budget: keep business fixed costs under control
- Sale price with margin and VAT: price the units you reorder