When should I place my next order?
A reorder point is the inventory position that triggers replenishment. Multiply average daily unit demand by supplier lead time, then add safety stock. Compare the threshold with on-hand stock plus incoming units minus backorders; order quantity is a separate decision.
The formula, explained.
Reorder point = daily demand × lead time + safety stock Estimated safety stock = maximum demand × maximum lead time − average demand × average lead time
A worked example
- Suppose your store sells an average of 10 units each day. A replacement order takes 14 days from placement until the stock is received and ready for sale. Include production, transit, customs and receiving in that lead time. Multiplying daily demand by the full lead time gives 140 units of expected demand while replenishment is in progress.
- Add a safety buffer of 40 units to cover some demand or delivery variation. The reorder point becomes 10 × 14 + 40 = 180 units. This threshold is a planning trigger, not a guarantee against stockouts. A seasonal promotion or supplier delay can consume the buffer faster than the historical averages suggest.
- Check inventory position before ordering. If 120 units are on hand, 80 are confirmed incoming and 20 are backordered, inventory position is 120 + 80 − 20 = 180 units, so the trigger has been reached. Decide how many units to buy separately using cash, storage, order minimums and expected future demand. Revisit the inputs when sales patterns or supplier performance change.
How to interpret your result
Compare the trigger with inventory position: on-hand plus confirmed incoming units minus backorders. A reorder point tells you when to buy; it does not determine how many units to order.
Common mistakes to avoid
Using supplier production time alone misses transit and receiving delays. The maximum-based safety estimate is a planning shortcut, not a guaranteed service level.
Frequently asked questions
When should I place my next order?
You sell 10 units per day, wait 14 days for delivery and hold 40 safety units. Place an order when your inventory position reaches 10 × 14 + 40 = 180 units. Compare the trigger with inventory position: on-hand plus confirmed incoming units minus backorders. A reorder point tells you when to buy; it does not determine how many units to order.
What is the difference between reorder point and reorder quantity?
Reorder point is the inventory level that triggers a new purchase order. Reorder quantity is how many units to buy once that trigger is hit. This calculator only answers the timing question. Order quantity is typically set separately, for example with an economic order quantity or a fixed case-pack size.
What is the difference between reorder point and safety stock?
Safety stock is the buffer portion held to absorb demand spikes or delivery delays. Reorder point is the full trigger level: expected demand during lead time plus that safety stock. Safety stock is one of the two inputs that make up the reorder point, not a separate trigger on its own.
How often should I recalculate my reorder point?
Recalculate whenever average daily sales or lead time shifts meaningfully, such as after a new supplier, a seasonal demand change, or a sustained sales trend. A reorder point set from stale sales or lead-time data will trigger orders too early or too late relative to current conditions.
Does the reorder point account for seasonal demand?
Not automatically. The calculator uses the daily demand and lead time figures you enter, so a single reorder point reflects a single demand rate. For seasonal items, recalculate with the demand rate expected for the upcoming period rather than a full-year average.
Is the reorder point calculated per product or for my whole inventory?
Reorder point is calculated per SKU, since each product has its own sales rate, lead time and safety stock requirement. Running the calculation separately for each product is necessary; a single store-wide reorder point is not meaningful.
Can I change the assumptions?
Yes. All inputs can be edited, and advanced assumptions are available below the main inputs. Use values from the same period and currency. Changing display currency changes the symbol, not the underlying amount.
Are my financial numbers saved?
No. Calculations happen locally in your browser. Sharing creates a link containing the inputs, and exporting saves a CSV report to your device. You choose whether to share those artifacts.
Sources & methodology
Learn more about our calculation methodology and estimate limitations.