About the Reorder Point Calculator
The reorder point is the stock level at which you should place a new purchase order so it arrives before you run out. It equals the demand you expect during the supplier’s lead time plus a safety stock buffer that absorbs busier-than-usual days and late deliveries.
Enter your average daily sales in units and the lead time in days, then choose how to size safety stock: a statistical service level (using the variability of demand and lead time), the simple max-minus-average method, or a fixed number of units you already hold. The calculator returns the reorder point, the safety stock, lead-time demand and how many days of sales the reorder point covers.
It is built for e-commerce sellers, retailers, restaurants and small manufacturers managing SKUs by hand or in a spreadsheet. Results are rounded up to whole units, because stocking a fraction of a unit short can still cause a stockout.
With the default inputs, the reorder point is 442 units. Change any value above to recalculate instantly.
How to use the reorder point calculator
- 1Enter average units sold per day, using at least a few months of sales history.
- 2Enter the average supplier lead time in days, from order to shelf.
- 3Pick a safety stock method and fill in its inputs.
- 4Reorder whenever on-hand plus on-order stock drops to the reorder point.
Formula and method
Lead-time demand is average daily demand multiplied by the average lead time in days. Safety stock is added on top to protect against variation. With the service-level method, z is the standard normal value for the chosen in-stock probability (1.645 for 95%) and the combined standard deviation reflects both daily demand variability and lead-time variability; with a reliable supplier (σL = 0) it simplifies to z × σd × √L.
The max-minus-average method sizes safety stock as the worst-case demand during the worst-case lead time minus the normal lead-time demand. It needs no statistics but tends to hold more stock. Safety stock and reorder point are rounded up to whole units.
- d
- Average daily demand (units)
- L
- Average lead time (days)
- σd
- Standard deviation of daily demand
- σL
- Standard deviation of lead time (days)
- z
- Service factor from the normal distribution
- SS
- Safety stock
Worked examples
95% service level, steady supplier
Lead-time demand is 40 × 10 = 400 units. Safety stock is 1.645 × 8 × √10 ≈ 41.6, rounded up to 42 units, so reorder when stock hits 442 units — about 11 days of sales.
99% service with variable lead time
Combined variability is √(14 × 6² + 25² × 2²) = √3,004 ≈ 54.8 units. At 99% (z = 2.326) safety stock is about 127.5, rounded to 128, giving a reorder point of 350 + 128 = 478 units.
Max − average method
Worst case is 60 units a day for 14 days = 840 units. Subtracting normal lead-time demand of 400 leaves 440 units of safety stock, so the reorder point equals the worst case, 840 units.
Frequently asked questions
What is the reorder point formula?+
Reorder point = average daily demand × lead time in days + safety stock. For example, selling 40 units a day with a 10-day lead time and 42 units of safety stock gives a reorder point of 442.
How do I calculate safety stock?+
The most common statistical formula is z × σd × √L, where z comes from your target service level (1.645 for 95%), σd is the standard deviation of daily demand and L is lead time in days. Add a lead-time term if deliveries vary.
What service level should I choose?+
Many businesses use 95% for regular items and 98–99% for best-sellers or critical parts. Each step up adds safety stock at an increasing rate, so reserve very high levels for items where stockouts are costly.
Should I include stock already on order?+
Yes. Compare the reorder point with your inventory position — stock on hand plus open purchase orders minus backorders — so you do not place duplicate orders while a delivery is on its way.
How is the reorder point different from economic order quantity?+
The reorder point tells you when to order; economic order quantity (EOQ) tells you how much to order each time to minimise ordering and holding costs. Most inventory systems use both.