Reorder Point Calculator
Place the next order when stock hits 180; you expect to sell 140 before it arrives.
How the reorder point calculation works
Work out lead-time demand
Average daily sales × days the supplier takes to deliver. 20 a day × 7 days = 140 units.
Add safety stock
A buffer for days when sales jump or delivery runs late. Enter your own number, or let the calculator work it out from a service level or from worst-case figures.
Service level: z × standard deviation × √lead time
z is the standard normal value for the service level you want: 1.645 for 95%. With daily sales varying by 5 units and a 7-day lead time: 1.645 × 5 × √7 ≈ 21.8 units.
Worst case: max usage × max lead time − average demand
30 a day × 10 days = 300, minus the normal 140, gives 160 units of safety stock.
Reorder at the total
Reorder point = lead-time demand + safety stock. 140 + 40 = 180 units.
Worked example. Selling 20 units a day with a 7-day lead time uses 140 units while you wait. With 40 units of safety stock the reorder point is 180 units, about 9 days of cover. With a 95% service level and daily sales that vary by 5 units, safety stock is about 22 units and the reorder point 162.
Reorder Point FAQ
What is the reorder point formula?
Reorder point = average daily usage × lead time in days + safety stock. 20 × 7 + 40 = 180.
What is a reorder point?
The stock level at which you place the next order, so the delivery arrives before you run out. It covers expected sales during the lead time plus a safety buffer.
Is reorder level the same as reorder point?
Yes. Reorder level, reorder point and ROP are names for the same number: the stock count that triggers a new purchase order.
What is the safety stock formula?
With a target service level: safety stock = z × standard deviation of daily sales × √lead time in days. At 95% (z = 1.645), a standard deviation of 5 units and a 7-day lead time: 1.645 × 5 × 2.646 ≈ 21.8 units. This version covers swings in sales; use the worst-case method if late deliveries are the bigger risk.
What z-score goes with each service level?
z is the standard normal value for the service level: 90% → 1.282, 95% → 1.645, 98% → 2.054, 99% → 2.326, 99.9% → 3.090. The calculator works z out from any level you type.
How do I calculate safety stock without statistics?
A simple method is (highest daily usage × longest lead time) − (average daily usage × average lead time). 30 × 10 − 20 × 7 = 300 − 140 = 160 units. It is easy to explain but usually gives a bigger buffer than the service-level method.
What does a 95% service level mean?
In about 95 of every 100 order cycles, stock lasts until the delivery arrives. Going from 95% to 99% raises z from 1.645 to 2.326, so safety stock in the example rises from about 22 to 31 units.
What happens if I set the reorder point too low?
You run out before the delivery arrives and lose sales. Too high and you hold more stock and cash than you need.
How is reorder point different from EOQ?
The reorder point says when to order; EOQ says how much to order each time. Most businesses use both.