Free calculator
Reorder point calculator
The stock level that should trigger the next purchase order, built from your own velocity, your supplier's real lead time and a safety cover you choose rather than one a formula assumed.
A reorder point calculator works out the stock level at which a purchase order has to be placed: the units sold during the supplier's lead time plus a safety cover you choose. It also sizes the order needed to reach your target days of cover.
Demand and supply
What you hold, and what you are aiming at
Reorder when stock falls to
748units
You are at 420 including stock on order, so the order is already due: about 1.468 units, €28.112,20 at landed cost.
Lead time demand
570
sold while you wait
Safety stock
178
14 days of cover
Order now
1.468
units, to hit target cover
Safety cover is held in days rather than derived from a service level on purpose: a number you chose because your supplier is occasionally two weeks late is easier to defend, and easier to revise, than one produced by a statistical assumption about demand that nobody in the building can check.
Watch cover and velocity per SKUThe formula
A number to watch, instead of a shelf to check
A reorder point converts “we should probably order more” into a threshold: the units that will sell while the supplier is preparing and shipping, plus a cushion for the weeks when either demand or the supplier misbehaves. Cross it, and the order goes out that day.
The stock position, not the shelf, is what crosses it. Units already on order are stock you have, just not yet: forgetting them is the classic double-order that turns a cash-flow problem into a warehouse problem.
The safety cover is held in days you chose, deliberately rather than derived from a service level and an assumed distribution. A cushion you can defend, because the supplier was two weeks late twice this year, is easier to revise than one produced by a statistical model nobody in the building can audit.
The order value is priced at landed cost, because that is the cash the purchase actually consumes.
Where it goes wrong
Four ways a reorder point fires at the wrong moment
Two of these order too late and two order too much, and all four are ordinary.
Stock on order forgotten
A shipment in transit already covers the gap it was ordered for. Comparing the shelf rather than the stock position against the trigger produces a second order nobody needs, and the cash for it leaves immediately.
The contractual lead time
Use what the last few orders actually took, door to saleable shelf, including customs, quality checks and putaway. The agreed lead time is a plan; the observed one is what your stock has to survive.
Ordering exactly to the target cover
Units keep selling while the shipment is in transit, so an order sized only for the target arrives already behind. Covering the target plus the lead time is what stops a store reordering again a fortnight after a delivery lands.
Safety stock everywhere, equally
A reliable supplier and a steady product need almost no cushion; a seasonal product from a distant supplier needs a large one. A blanket safety policy overstocks half the catalogue to protect the other half.
Worked example
A 45-day supplier and a fortnight of nerves
The calculator’s defaults: 380 units sold in 30 days, a 45-day lead time, 14 days of safety cover, 420 units on hand and nothing on order, aiming at 90 days of cover at a €19,15 landed cost.
At 12,67 units a day, 570 units sell during the lead time and 178 are the safety cushion.
The trigger is 748 units and the position is 420, so the order is overdue rather than upcoming. Ordering 1.468 units brings the store to 90 days of cover after the shipment lands, and consumes €28.112 of cash to do it.
That last figure is the reason reorder points and cash planning are one conversation: a correct order can still be an unaffordable one, and finding that out at the trigger is far better than finding it out at the invoice.
Questions
Reorder points, answered
What is a reorder point?
The stock level at which you place the next order, so the delivery arrives before the shelf empties. It is the demand during the lead time plus a safety cushion: at 12,67 units a day, a 45-day lead time and 14 days of safety, the trigger is around 748 units rather than a round number somebody picked.
How much safety stock should I hold?
Enough to cover how late your supplier actually is and how much demand actually varies, both of which you can observe. Expressing it in days of cover keeps it honest and revisable: a supplier that has been two weeks late twice this year justifies two weeks, and a reliable one does not.
Does stock already on order count?
Yes, and forgetting it is the classic double-order. What matters is the stock position, on hand plus on order, against the reorder point. This calculator uses the position, which is why entering an inbound shipment can turn an apparently urgent order into one that is weeks away.
How many units should I actually order?
Enough to reach your target cover once the delivery lands, which means covering the lead time as well as the target. Ordering exactly to target ignores the units that sell while the shipment is in transit, and is how stores end up reordering again the week after a delivery arrives.
Is this a demand forecast?
No, deliberately. It projects the velocity you measured, and the safety cover is the buffer against being wrong. Forecasting is a separate discipline with its own failure modes, and a reorder point that is transparent about its assumptions is more useful than a forecast nobody can audit.
More calculators
Four more, all free, all built on the same statement.
Want the long version rather than the arithmetic? Profitable on paper, no cash in the bank.
The terms this calculator uses:
Velocity and cover per SKU, computed from real orders
nouz keeps units sold, cover and stock value per variant from your own sales, so the trigger you set here is watched against numbers nobody has to maintain by hand.