Reorder Point Calculator

How reorder point supports replenishment

Reorder point is a practical trigger for replenishment. It sets the inventory position level at which you should place a new order so incoming stock arrives just as your on-hand inventory is projected to run out. The calculation combines the expected demand during lead time with any additional buffer stock that protects against variability. That buffer is often called safety stock and it helps you maintain service levels when real demand or lead time fluctuates.

To use reorder point effectively, start with a reliable estimate of average daily demand for the SKU or lane. This is not a forecast for a single day; it is an average across a planning horizon such as a quarter or a year. Lead time should reflect the total time between placing an order and receiving usable inventory, including supplier processing, transportation, and receiving. If your lead time varies, use a representative average and consider adding extra safety stock to cover variability. The safety stock input should align with your service level target and your demand volatility. If you have not computed safety stock yet, the Safety Stock Calculator in this category can help.

Reorder point is often implemented in an inventory system as a threshold. When the inventory position (on-hand plus on-order minus backorders) drops to or below the reorder point, a new purchase order or transfer order is triggered. This makes the policy operationally simple and easy to audit, especially across many SKUs. It also scales well for distribution centers, where planners need consistent rules that can be tuned by SKU class, supplier, or service tier.

Keep in mind that reorder point is not a batch size decision. It tells you when to order, not how much to order. Pair it with an order quantity strategy such as EOQ, minimum order quantity, or lot-sizing policies. If your demand is highly seasonal, revisit your daily demand assumptions and safety stock levels on a schedule so the reorder point stays aligned to actual operating conditions. This calculator is designed to support those rapid adjustments without sharing sensitive demand data with any external service.

Formula

Reorder point: ROP = d * L + SS

Lead time demand: d * L

Lead time coverage: ROP / d (in days of average demand)

Example calculation

If average daily demand is 120 units, lead time is 14 days, and safety stock is 300 units, then lead time demand is 120 * 14 = 1,680 units. The reorder point is 1,680 + 300 = 1,980 units. That means you should place a new order when your inventory position reaches about 1,980 units to avoid stockouts during lead time.

FAQs

What is a reorder point?

A reorder point is the inventory position at which a new order should be placed to avoid stockouts during lead time.

How does safety stock affect the reorder point?

Safety stock is added on top of lead time demand to protect against variability, increasing the reorder point.

Does this tool store my data?

No. The calculation runs in your browser and inputs are not sent anywhere.

Can I use daily or weekly demand?

Use average demand per day and lead time in days. If you have weekly demand, convert it to daily first.

How it works

This calculator multiplies average daily demand by lead time and adds safety stock to produce a reorder point. All computation is client-side for privacy.

Disclaimer

Reorder points are estimates based on historical averages. Review seasonal demand and supplier variability before applying results to live inventory.