C

Reorder Point Calculator

Calculate optimal reorder points for your inventory management. Get accurate results based on demand patterns, lead times, and service levels to minimize stockouts and optimize inventory costs.

Calculate Your Reorder Point

Average Daily Demand

Average number of units sold per day

Lead Time

Days from ordering to receiving new inventory

Safety Stock Buffer

Extra days of inventory to prevent stockouts

Service Level

Percentage of time you want to avoid stockouts

Current Stock

Current number of units in inventory

Reorder Point Analysis

250
units (Reorder Point)
Order when inventory reaches this level

Inventory Breakdown

📦 Lead Time Demand
Units needed during lead time
175 units
🛡️ Safety Stock
Buffer inventory (3 days)
75 units
📊 Service Level
Stockout protection
95%
⚠️ Stockout Risk
Chance of running out
5%

Current Status

Current Stock:200 units
Reorder Point:250 units
🚨 Time to reorder!

Inventory Management Categories

Business Types

Retail Stores7-14 days

Standard retail operations

  • • Higher safety stock needed
  • • Seasonal demand variations
E-commerce3-7 days

Fast fulfillment required

  • • Lower lead times
  • • Higher service levels
Manufacturing14-30 days

Production planning critical

  • • Longer lead times
  • • Bulk ordering benefits

Service Levels

Standard (90%)Low risk

Cost-effective approach

  • • Lower inventory costs
  • • Acceptable stockout risk
Premium (95%)Balanced

Most common choice

  • • Good service level
  • • Reasonable inventory cost
Critical (99%)High cost

Essential inventory only

  • • Maximum protection
  • • Higher holding costs

How to Calculate Reorder Point

Reorder Point Formula

Reorder Point = (Average Daily Demand × Lead Time) + Safety Stock
Safety Stock = Average Daily Demand × Safety Stock Days

Calculation Steps:

  1. 1
    Determine average daily demand
    Calculate from historical sales data
  2. 2
    Calculate lead time demand
    Multiply daily demand by lead time days
  3. 3
    Add safety stock buffer
    Extra inventory for demand variability
  4. 4
    Set reorder trigger
    Order when inventory reaches this level

Important Considerations

⚠️ Business Disclaimer

This calculator provides estimates. Consider your specific business needs and consult inventory management professionals for critical decisions.

📊 Demand Variability

Actual demand can vary significantly

  • • Seasonal fluctuations
  • • Market trends
  • • Economic conditions
⏱️ Lead Time Changes

Supplier lead times can fluctuate

  • • Supplier capacity issues
  • • Transportation delays
  • • Global supply chain disruptions
💰 Cost Considerations

Balance inventory costs with service levels

  • • Holding costs vs. stockout costs
  • • Order quantity optimization
  • • Cash flow impact
🔄 Regular Review

Update parameters regularly

  • • Monitor actual vs. predicted demand
  • • Track lead time performance
  • • Adjust safety stock levels

Example Cases

Case 1: Retail Electronics Store

Input Parameters: Daily demand: 15 units
Lead Time: 10 days
Safety Stock: 5 days buffer
Service Level: 95%
Reorder Point: 225 units
Lead Time Demand: 150 units
Safety Stock: 75 units
Current Stock: 300 units ✅

Use Case: Popular smartphone accessories with steady demand. Store has adequate inventory and can wait before reordering.

Case 2: E-commerce Fashion Retailer

Input Parameters: Daily demand: 8 units
Lead Time: 14 days
Safety Stock: 7 days buffer
Service Level: 99%
Reorder Point: 168 units
Lead Time Demand: 112 units
Safety Stock: 56 units
Current Stock: 150 units 🚨

Use Case: Seasonal clothing item with higher service level requirement. Time to reorder to avoid stockouts during peak season.

Related Calculators

Frequently Asked Questions

What is a reorder point?
A reorder point is the minimum inventory level at which you should place a new order to replenish stock. It ensures you have enough inventory to meet customer demand during the lead time (time from ordering to receiving new stock) plus a safety buffer to prevent stockouts.
How is the reorder point calculated?
Reorder Point = (Average Daily Demand × Lead Time) + Safety Stock. The lead time demand covers expected sales during the ordering period, while safety stock provides a buffer for demand variability and supply delays.
What is safety stock and why is it important?
Safety stock is extra inventory kept to prevent stockouts due to unexpected demand spikes or supply delays. It acts as a buffer to maintain customer service levels and avoid lost sales. The amount depends on your service level requirements and demand variability.
What does service level mean?
Service level is the percentage of time you want to avoid stockouts. A 95% service level means you accept a 5% chance of running out of stock. Higher service levels require more safety stock but reduce the risk of lost sales.
How do I determine lead time?
Lead time is the total time from placing an order until receiving the inventory. It includes supplier processing time, manufacturing time, shipping time, and receiving/processing time. Track historical data to get accurate lead time estimates.
Reorder Point Calculator