Reorder Point Calculator

What Is a Reorder Point?

The reorder point (ROP) is the inventory level that triggers a new purchase order. When stock drops to this level, you should reorder so new stock arrives before you run out during lead time.

Reorder Point Formula

$$\text{ROP} = (\text{Average Daily Demand} \times \text{Lead Time Days}) + \text{Safety Stock}$$

Lead time demand covers units sold while waiting for delivery. Safety stock buffers against demand spikes or supplier delays. Days of stock at ROP shows how long current inventory lasts at the reorder trigger:

$$\text{Days of Stock} = \frac{\text{ROP}}{\text{Average Daily Demand}}$$

Frequently Asked Questions

What is safety stock?

Safety stock is extra inventory kept to handle unexpected demand increases or delivery delays. It prevents stockouts during lead time.

How do I find average daily demand?

Divide total units sold over a period by the number of days in that period. Use recent sales data for the best estimate.

What is lead time?

Lead time is the number of days between placing an order and receiving the goods. Include processing and shipping time.

Why show days of stock at ROP?

It tells you how many days of sales your reorder point represents, making it easier to sanity-check the result against your operations.

Should I reorder exactly at ROP?

Yes, in theory. In practice, review seasonal trends and supplier reliability. Increase safety stock for volatile demand or unreliable suppliers.

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What Is a Reorder Point?

Reorder Point Formula

Frequently Asked Questions

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