Inventory Reorder Point Calculator

Calculate the reorder point for inventory to avoid stockouts. The reorder point triggers a purchase order before you run out of stock, factoring in lead time and safety stock.

📦 Operations💼 Reorder Point = (Daily Sales * Lead Time) + Safety Stock
Average daily sales (units)
Supplier lead time (days)
Lead time demand variability (daily std dev)
Service level target (%)
Please enter valid values.

Formula & Reference

VariableFormulaUnits
Inventory Reorder Point CalculatorReorder Point = (Daily Sales * Lead Time) + Safety Stockunits

Step-by-Step Examples

Example 1
Standard Product

25 units/day sales, 7 days lead time, 5 units std dev, 95% service.

  • Avg demand: 25*7 = 175 units
  • Safety stock: 1.65*5*sqrt(7) = 21.8 units
  • ROP: 175+22 = 197 units
✓ Reorder at 197 units
Example 2
High Variability

50 units/day, 14 days lead time, 15 units std dev, 99% service.

  • Avg demand: 700 units
  • Safety stock: 2.33*15*sqrt(14) = 130.8 units
  • ROP: 700+131 = 831 units
✓ Reorder at 831 units
Example 3
Low Variability

10 units/day, 3 days lead time, 1 unit std dev, 90% service.

  • Avg demand: 30 units
  • Safety stock: 1.28*1*sqrt(3) = 2.2 units
  • ROP: 30+3 = 33 units
✓ Reorder at 33 units

Real-World Applications

📦
Inventory Management
Prevent stockouts while minimizing excess inventory carrying costs.
🏬
Manufacturing
Ensure raw materials arrive before production lines run dry.
🛒
Retail/E-commerce
Maintain service levels without overstocking slow-moving SKUs.
📊
Supply Chain
Balance inventory investment against stockout risk systematically.

Common Mistakes to Avoid

⚠️
Ignoring demand variability in safety stock

Reorder point without safety stock assumes perfectly predictable demand - rare in practice. Safety stock buffers against variability.

⚠️
Using average lead time without variability

Lead time also varies. If supplier sometimes takes 14 days instead of 7, safety stock based on 7-day average will fail.

⚠️
Setting one service level for all products

High-value or high-margin products deserve 99% service levels. Low-margin slow-movers can tolerate 90%. Differentiate by product priority.

Frequently Asked Questions

What is a reorder point? ▾
The inventory level at which you trigger a new purchase order, calculated to ensure stock arrives before existing inventory runs out, accounting for both average demand and variability.
What is safety stock? ▾
Buffer inventory above average demand during lead time, held to protect against demand spikes or supplier delays. Calculated from demand variability and service level target.
What service level should I target? ▾
95-99% for key SKUs where stockouts damage customer relationships. 90% for low-priority items. Distinguish A/B/C items (ABC analysis) and apply appropriate service levels.
How does lead time affect reorder point? ▾
Longer lead time requires higher reorder point because more demand occurs while waiting for the order to arrive. Reduce lead time by working with local suppliers or holding strategic buffer stock.
What is economic order quantity (EOQ)? ▾
EOQ optimizes order quantity to minimize total ordering plus holding costs. Reorder point determines WHEN to order; EOQ determines HOW MUCH to order.

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