Reorder Point Calculator
Calculate the reorder point for inventory management. Determine when to place a new order to avoid stockouts while minimizing inventory costs.
Buffer stock to account for variability
How to Use This Calculator
- Enter average demand (units per day, week, month, or year).
- Enter lead time (time from order to delivery) in days, weeks, or months.
- Optionally enter safety stock (buffer inventory for variability).
- The calculator displays reorder point and demand during lead time.
- Use this to optimize inventory management and prevent stockouts.
Reorder Point Formula
Reorder point is calculated from demand, lead time, and safety stock:
Demand During Lead Time = Average Demand × Lead Time
Example: 100 units/day demand, 7-day lead time, 50 safety stock: Demand During Lead Time = 100 × 7 = 700 units. Reorder Point = 700 + 50 = 750 units. Place order when inventory reaches 750 units.
Full Description
Reorder point is a critical inventory management metric that determines when to place a new order to replenish stock. It ensures inventory arrives before stockout occurs while minimizing carrying costs. The reorder point is calculated based on average demand, lead time (time from order to delivery), and safety stock (buffer inventory for variability).
The reorder point formula accounts for demand during the lead time period—how much inventory will be consumed while waiting for the new order to arrive. Safety stock provides a buffer for unexpected demand spikes or delivery delays. Setting the reorder point too low causes stockouts, while setting it too high increases carrying costs. Optimal reorder point balances these factors.
This calculator helps you determine reorder point for your inventory. Enter average demand, lead time, and optionally safety stock, and it calculates the reorder point. Use it to optimize inventory management, prevent stockouts, minimize costs, or understand when to reorder. Reorder point is essential for efficient inventory control and supply chain management!
Frequently Asked Questions
What is reorder point?
Reorder point is the inventory level at which a new order should be placed to replenish stock. It ensures inventory arrives before stockout occurs. Reorder Point = (Average Demand × Lead Time) + Safety Stock.
How do I calculate reorder point?
Reorder Point = Demand During Lead Time + Safety Stock. Demand During Lead Time = Average Demand × Lead Time. Example: 100 units/day demand, 7-day lead time, 50 safety stock: Reorder Point = (100 × 7) + 50 = 750 units.
What is safety stock?
Safety stock is buffer inventory to account for variability in demand and lead time. It protects against stockouts due to unexpected demand spikes or delivery delays. Safety stock = (Max Demand - Avg Demand) × Lead Time, or use statistical methods.
Why is reorder point important?
Reorder point prevents stockouts while minimizing inventory costs. Ordering too early increases carrying costs. Ordering too late causes stockouts and lost sales. Optimal reorder point balances these factors. It's essential for inventory management and supply chain efficiency.