Reorder point calculator
Work out the stock level at which you should place the next purchase order, so new stock arrives before the shelf runs empty. Use it for any SKU you buy from a supplier on a known lead time.
Calculate your reorder point
Use the same unit of measure for demand and safety stock.
- Reorder point (units)
- 340
- Demand during lead time (units)
- 280
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The formula
Reorder point = (average daily demand × lead time in days) + safety stock
- Average daily demand
- Units shipped per day, averaged over a recent period of normal trading. Take it from actual shipments in your order or movement history, not from a forecast or a sales target.
- Lead time (days)
- Days from placing the purchase order to the stock being available to pick: supplier processing, transit, receiving and putaway. Use observed receipt dates, not the supplier's quoted lead time.
- Safety stock
- Extra units held to cover demand spikes and late deliveries during the lead time. Enter zero if you hold none, or size it with the safety stock calculator.
Worked example
For example, olive oil SKU OIL-008 sells 40 units a day on average. The supplier takes 12 days from order to shelf, and you keep 150 units of safety stock. Demand during the lead time is 40 × 12 = 480 units. Add the safety stock: 480 + 150 = 630. When available stock plus anything already on order for OIL-008 falls to 630 units, raise the next purchase order.
How to use your reorder point
The reorder point tells you when to order, not how much. Once stock reaches the trigger, the order size is a separate decision shaped by supplier minimums, case packs and cost. The economic order quantity is one way to set it.
Compare the trigger against your inventory position, not the physical count on the shelf. Inventory position is sellable stock plus open purchase orders, minus backorders. Leave out stock on hold, in quarantine or damaged, because you cannot ship it. Include open purchase orders, or you will order the same replenishment twice.
Common reorder point mistakes
Most bad reorder points come from bad inputs rather than bad arithmetic.
- Using the supplier's quoted lead time instead of how long orders actually take to arrive and be put away.
- Averaging demand over weeks when the SKU was out of stock. Zero sales on empty days drag the average down.
- Counting quarantined, held or damaged units as available.
- Setting the number once and never revisiting it after a season, promotion or supplier change.
When the simple formula breaks down
The formula assumes demand is steady and lead time is predictable. Seasonal products, promotions and new launches break the first assumption. For those, use expected demand for the coming lead-time window rather than a historical average, and recalculate more often.
Slow, intermittent items such as spare parts may sell nothing for weeks and then several at once. An average of 0.3 units a day is not a useful trigger. Set a minimum stock level by judgment instead. If you order on a fixed schedule, such as every Monday, cover demand over the lead time plus the review period.
Keeping reorder inputs honest in a WMS
A reorder point is only as good as its demand and lead-time figures. When every shipment and receipt is recorded as a stock movement, you get real consumption and real receipt dates instead of estimates.
In NextStock, the supplier catalog holds lead times, pack sizes and minimum order quantities. Replenishment suggestions propose purchases and transfers based on demand and cover. Held and quarantined stock carries its own status, so the stock you compare against is the stock you can promise to customers.
Frequently asked questions
Short, direct answers to the questions warehouse teams ask most.
Should the reorder point include stock already on order?
Compare the reorder point against available stock plus open purchase orders that have not arrived yet. If you only look at shelf stock, you will trigger a new order every day until the first one lands. Subtract backorders you have already promised, because that stock is spoken for.
What is the difference between a reorder point and safety stock?
Safety stock is the buffer you expect to still have when a replenishment arrives. The reorder point is the level that triggers the order, and it includes that buffer plus the demand you expect during the lead time. Safety stock is one input; the reorder point is the result.
How often should I recalculate reorder points?
Recalculate whenever demand or lead time changes noticeably: a new season, a promotion, a new supplier or a change in shipping route. For stable SKUs, a monthly or quarterly review is usually enough. Fast-moving or seasonal SKUs deserve more frequent checks than slow, steady ones.
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