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Reorder point calculator
Work out the stock level that should trigger your next purchase order, how many days you have before you reach it, and how much to order when you do. Enter your safety stock if you already know it, or let the calculator work it out from your demand history.
The formula, and what each half is doing
Reorder point = (average daily usage × average lead time) + safety stock
Lead time demand
What you will get through between placing the order and being able to use the goods. This is the predictable half. If nothing ever went wrong, this alone would be your reorder point, and you would arrive at zero stock exactly as the delivery landed.
Safety stock
The part that covers the weeks that do not go to plan, either because demand ran hot or because the supplier was late. Things do go wrong, which is why the reorder point sits above the lead time demand rather than on it.
Lead time is the input that moves this number most. It enters the calculation twice, once in the lead time demand and again inside the safety stock through the square root. A supplier slipping from two weeks to three raises your trigger level on both counts, so recalculate after a supplier change rather than waiting for the quarterly review.
Reorder point or safety stock: which number do you actually need?
These get used as though they are alternatives. They are not, and you need both.
| Safety stock | Reorder point | |
|---|---|---|
| Question it answers | How much cushion do I hold? | When do I place the order? |
| What it is | A quantity you keep in reserve | A trigger level you watch |
| Relationship | Sits inside the reorder point | Contains the safety stock |
| Changes when | Demand variability or service level changes | Usage, lead time or safety stock changes |
| Get it here | Safety stock calculator | This page |
Where reorder points go wrong
Leaving safety stock out
A reorder point set to lead time demand alone is a plan to run out on roughly half of all cycles, because average demand is exceeded half the time by definition.
Ignoring the review gap
If someone checks stock once a week, you can cross the trigger the day after a check and sit below it unnoticed for six more days. Cover the gap or check continuously.
Quoted lead time, not real lead time
Suppliers quote dispatch. You need order placed to goods usable. Inspection and put away days count, because you cannot issue what has not been received properly.
Mixed units
Weekly usage against a lead time in days is the classic error and it understates the trigger by roughly a factor of seven. If usage is per day, lead time is in days.
Setting it once
Lead times drift and demand moves. A reorder point that was right in January is not automatically right in September, and nothing in the system will tell you.
One number for every item
A cheap fastener and a long lead casting do not deserve the same treatment. Segment by value and by what a stockout actually costs before you set service levels.
Where the number goes once you have it
A reorder point is only useful if something is watching stock against it every day. That is a job for an inventory or ERP system rather than a spreadsheet, and it is worth being precise about which part each side does.
What Fabrica ERP does with it
- Every product record has a reorder point field, so the number this page produces has somewhere to live.
- The inventory list shows quantity on hand against it and flags the item Low Stock the moment on hand drops to or below the trigger.
- The MRP view puts demand, on hand and available side by side and flags the shortage before it reaches the shop floor.
What it does not do
- It does not calculate the reorder point for you. You set that figure, which is exactly what this page is for.
- MRP flags a shortage. It does not raise the purchase order on your behalf.
- It will not tell you when your lead times have drifted. That judgement stays with you.
Try it against your own part list
Fabrica ERP is Fuzen’s manufacturing template: 13 modules covering sales, production, inventory and purchasing, with a QuickBooks Online sync. It is a 14 day free trial loaded with sample data, then 999 dollars one time with hosting billed on usage.
Start the 14 day free trialTalk to us about a custom buildCommon questions
How do you calculate the reorder point?
Reorder point = (average daily usage x average lead time) + safety stock. The first term is the stock you expect to burn while you wait for the delivery. The second is your cushion for the weeks that do not go to plan. When quantity on hand falls to that number, you place the order. Leaving safety stock out is the most common mistake, and it means planning to run out on roughly half of all cycles.
What is the difference between reorder point and safety stock?
Safety stock is an amount you hold. The reorder point is a level that triggers an action. The reorder point contains the safety stock, so they are not alternatives and you need both numbers. If you are trying to work out how big the cushion itself should be, that is a different calculation and the safety stock calculator handles it.
What is EOQ and how does it relate to the reorder point?
They answer two different halves of the same decision. The reorder point tells you WHEN to place an order. Economic order quantity, or EOQ, tells you HOW MANY to buy when you do. EOQ = the square root of (2 x annual demand x cost per order, divided by the annual holding cost per unit). It is the quantity where your ordering costs and your holding costs are equal, which is the point at which their total is lowest.
What is the formula for reorder point in an EOQ model?
It is the same formula. A classic EOQ model assumes you watch stock continuously and order a fixed quantity every time you hit the trigger, so the reorder point is still (average daily usage x average lead time) + safety stock, and EOQ only sets the size of that order. The textbook version of EOQ also assumes demand is steady and lead time is fixed, which is why the safety stock term is doing real work in practice.
What if I only check stock once a week?
Then the plain reorder point is optimistic. You can cross it the day after a stock check and not notice for six more days, so you need to cover demand across the review gap as well as the lead time. The calculator adds review period x average daily usage on top for that reason. Treat the result as a floor: a fully rigorous periodic review model would also widen the safety stock, because it has to absorb variability over the lead time plus the review period rather than the lead time alone.
Should the reorder point change when lead time changes?
Yes, and this is the input that moves it most. Lead time enters the calculation twice, once directly in the lead time demand and again inside the safety stock through the square root. A supplier who slips from two weeks to three raises the trigger level on both counts. Recalculate after any supplier change rather than waiting for the quarterly review.
What lead time should I enter?
Order placed to goods available to use, not the transit time the supplier quotes. If inspection or put away has to finish before the material can be issued to a job, those days belong in the lead time. Understating it is the second most common reason a correctly calculated reorder point still leaves you short.
Does this work for multiple products at once?
The calculator on this page handles one item at a time. The Excel model further down handles 40, with the reorder point and both safety stock methods already written in as live formulas, plus a status column that turns red when quantity on hand reaches the trigger level.