Reorder point calculator
The reorder point is the stock level at which you place the next order, so it arrives before you run out. It equals the demand you expect during the supplier’s lead time plus your safety stock.
The reorder point formula
Reorder point = average daily demand × lead time in days + safety stock
Lead-time demand is what you expect to sell while you wait for the order. If stock falls to exactly that level and you order then, the new stock arrives just as the shelf empties — on an average day.
Days are rarely average, so safety stock is added on top. It covers the days when demand is higher or the supplier is later than usual. The safety stock calculator works it out from how much your demand and lead time vary.
The result is rounded up to whole units, because ordering a fraction too late is still too late.
Worked example
A shop sells 20 bottles of shampoo a day. The supplier delivers 7 days after an order. Lead-time demand is 20 × 7 = 140 bottles.
The shop keeps 40 bottles of safety stock, so the reorder point is 140 + 40 = 180. When stock on hand drops to 180, it orders.
How to use the result
Set it per item and location
Each item has its own demand and supplier lead time, and each location sells at its own pace — one reorder point per item per location.
Count what is already coming
Compare the reorder point with stock on hand plus stock on order, less what is promised to customers — otherwise you order twice.
Review it as demand changes
Seasonal items, promotions and new suppliers change both inputs. Recalculate at least every month for fast movers.
Questions and answers
The stock level that tells you to place a new order. It is the expected demand during the supplier’s lead time plus safety stock.
Multiply average daily demand by the lead time in days, then add safety stock. For 20 units a day, 7 days and 40 units of safety stock the reorder point is 180.
Then the reorder point equals lead-time demand, and you run out on every day that sells more than average or every order that arrives late.
No. The reorder point says when to order; the order quantity says how much. The economic order quantity calculator helps with how much.
Use the same unit for both inputs. If you sell 6 days a week and the lead time is in calendar days, convert demand to a per-calendar-day figure first.
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Let the app work it out for every item
Cash Flow Inventory works out safety stock, the reorder point and the order-up-to level for every item from its demand, lead time and service level, and refreshes them every night. The free plan has no time limit and needs no card.