Business
Reorder Point Calculator
Enter daily demand, supplier lead time and safety stock to get a reorder point.
When should you reorder?
Reorder too late and you stock out; too early and you tie up cash. Reorder point typically combines expected demand during lead time with safety stock that covers demand and lead-time wobble — adjust from your own history. This calculator gives a planning figure, not an ERP replacement. High-margin hero SKUs often warrant more buffer than slow movers. Margin tools such as product profit help decide which SKUs deserve deeper buffers. Unreliable suppliers need longer planned lead times or more safety stock. Pair with break-even units when cash tied in inventory threatens the wider plan. Estimates only. Marketing calendars should notify operations before a campaign spikes demand beyond the historical daily rate baked into reorder point. Dual sourcing can shorten effective lead time if the secondary supplier is truly ready. Review dead stock quarterly so safety buffers do not quietly grow on lines you no longer push. Marketing calendars should notify operations before a campaign spikes demand beyond the historical daily rate baked into reorder point. Dual sourcing can shorten effective lead time if the secondary supplier is truly ready. Review dead stock quarterly so safety buffers do not quietly grow on lines you no longer push in the catalogue.
Worked example
You sell 20 units a day, supplier lead time is 10 days, and you keep 50 units of safety stock. Reorder point ≈ 20 × 10 + 50 = 250 units. When on-hand plus on-order falls to 250, place a PO. If lead time stretches to 14 days in peak season, recalculate to 330 before you invent stockouts.
Limits and assumptions
Assumes relatively steady demand. Promotions and seasonality need separate forecasts. Does not optimise economic order quantity (EOQ). Not an inventory accounting system.
Frequently asked questions
What is a reorder point?
The inventory level that should trigger a new purchase order so stock arrives before you run out.
How do I choose safety stock?
Start from demand variability and how painful a stockout is. High-margin hero SKUs often warrant more buffer.
What if suppliers are unreliable?
Lengthen planned lead time or raise safety stock. Recalculate when supplier performance changes.
Should I include goods already on order?
Yes — compare reorder point to on-hand plus inbound, or you will double-order.
How do MOQs interact?
Reorder point triggers timing; MOQ sets how many you must buy. You may order more than the immediate gap.