Stop running out of your best sellers. Know the stock level that means “order now”.
Reorder point calculator
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days
Days from ordering to having it on the shelf
days
Reorder when stock falls to
108 units
Demand during lead time
48 units
Safety stock
60 units
Days of cover at the reorder point
9.0
The reorder point is the stock level at which you place a new order so it arrives before you run out: average daily usage × lead time + safety stock.
How the reorder point is calculated
| Figure | Formula |
|---|---|
| Lead-time demand | Average daily usage × Lead time (days) |
| Safety stock (simple) | (Max daily usage × Max lead time) − (Average daily usage × Average lead time) |
| Reorder point | Lead-time demand + Safety stock |
A shop sells an average of 12 bottles a day, the supplier takes 4 days, and on a bad week sales reach 18 a day with a 6-day delivery. Safety stock is (18 × 6) − (12 × 4) = 60 bottles, so the reorder point is 48 + 60 = 108 bottles: order when stock falls to 108.
Learn more about reorder points and safety stock, or read how to track inventory.
Questions
- What is a reorder point?
- The reorder point is the stock level at which you should place a new order so that it arrives before the item runs out.
- How do I calculate safety stock?
- A simple method is maximum daily usage times maximum lead time, minus average daily usage times average lead time; it covers a bad week of sales and a late delivery.
- How often should I recalculate reorder points?
- Whenever sales or supplier lead times change noticeably — at least every few months, and before busy seasons.
- Does SageBizet calculate reorder points for me?
- SageBizet’s reorder suggestions show the days of cover left for each item at its current rate of sale and suggest an order quantity, and each item can have its own low-stock threshold.
Keep reading
- GlossaryReorder point (ROP)A reorder point is the stock level that tells you to order again before you run out. See the formula, a worked example and the mistakes that cause stockouts.
- GlossarySafety stockSafety stock is the buffer that stops you running out when sales spike or deliveries slip. Three ways to calculate it, a worked example and common mistakes.
- GuideHow to track inventory for a small businessTrack inventory by recording every stock movement with a reason, counting on a schedule, and reordering at a calculated reorder point. Worked examples inside.
- FeatureInventoryFree, browser-based inventory software: stock that drops with every sale, adjustments with a reason, low-stock alerts and suggested reorder quantities.
- GlossaryDead stockDead stock is inventory that has stopped selling and ties up your cash. How to measure it, a worked example, what causes it and how to clear it.
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