Reorder point calculator

What is a reorder point and why does safety stock matter?

Your reorder point (ROP) is the inventory level that signals it is time to place a replenishment order with your supplier. If you wait until stock hits zero, you will face days or weeks of stockouts while waiting for delivery. Ordering too early ties up cash in excess inventory and storage space.

A complete reorder point consists of two components:

• Lead time demand: The stock you expect to sell or use during normal delivery transit (Average Daily Usage × Lead Time Days).
• Safety stock: An extra reserve cushion held to protect against unexpected demand spikes or vendor shipping delays.

A worked example

Suppose you run a coffee roastery and sell an average of 15 lbs of espresso beans per day. Your green bean supplier takes 10 calendar days to deliver after receiving your purchase order:

• During normal lead time, you will consume 150 lbs of beans (15 lbs/day × 10 days).
• On peak sales days, usage jumps to 25 lbs/day, and in bad weather delivery can stretch to 14 days.
• Your safety stock calculation: (25 lbs × 14 days) − (15 lbs × 10 days) = 350 − 150 = 200 lbs.
• Your reorder point: 150 lbs lead demand + 200 lbs safety stock = 350 lbs.
• If your current warehouse stock is 180 lbs, you are already below the 350 lb threshold and should place a purchase order immediately.

Common mistakes

The most common mistake is treating calendar days and business days interchangeably. If your supplier only ships on weekdays, a 10-business-day lead time is actually 14 calendar days. Another mistake is ignoring supplier minimum order quantities (MOQs); your reorder point tells you when to order, while your economic order quantity (EOQ) or MOQ determines how much to order.