Business
Reorder Point Calculator
Find the stock level that should trigger a new order, using daily usage, lead time and safety stock.
This level is the stock quantity at which a new order should be placed, so the stock on hand lasts until the delivery arrives.
Formula
Reorder point = (average daily usage multiplied by lead time in days) plus safety stock.
How it works
Multiply how many units sell each day by how many days a new order takes to arrive, then add safety stock for surprises. When stock falls to that level, order now: the remaining stock should last until the delivery lands.
Worked example
For example, 20 units per day × 7 days + 50 units of safety stock = 190 units, so a new order should be placed when stock falls to 190 units.
FAQs
What is safety stock for?
It covers demand spikes and late deliveries, so a small delay does not empty the shelf.
What if lead time varies?
Use the longest realistic lead time, or add extra safety stock, to avoid stockouts.
How often should I recalculate?
Whenever sales pace, suppliers or lead times change noticeably.
Estimates only, not financial advice. Check your figures before making a business decision.
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