Reorder Point Calculator

Estimate when to reorder a material or finished product using average daily sales or usage, supplier lead time and safety stock.

Average demand can change. Review recent sales, supplier reliability and seasonality before purchasing.

Need ongoing inventory and reorder tracking?

The True-Cost Pricing and Reorder System keeps product costs, pricing and replenishment decisions together in one editable workbook.

How the reorder point works

Lead-time demand is average daily usage multiplied by the number of days it takes a supplier to deliver. Safety stock is added as a buffer. When stock on hand falls to or below that total, a new order is usually due if your demand and lead-time assumptions are still realistic.

For example, if you normally use three units per day and a supplier takes ten days to deliver, expected demand during lead time is about thirty units. Adding ten units of safety stock gives a reorder point of forty. If current stock is already forty or lower, the calculator flags a reorder. The calculation is intentionally simple, which makes the assumptions easy to see and change.

Average demand should come from a period that resembles the period you are planning for. A holiday rush, promotion or wholesale order can make a short recent window unrepresentative. Lead time should reflect the time from placing an order until stock is actually available to use or sell, not merely the supplier's dispatch time.

How much safety stock should you use?

Safety stock is a buffer for uncertainty. A larger buffer can reduce stockout risk but ties up more cash and storage space. A smaller buffer keeps inventory leaner but leaves less protection against late suppliers or sudden demand. Review the number when supplier reliability, seasonality, minimum order quantities or sales velocity changes.