Inventory
Reorder Point Calculator
Know when to reorder before you run out, with a basic mode and an advanced Z-score mode
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Mode
Reorder point
Lead-time stock
Safety stock
Stock over time
How does it work?
The reorder point (ROP) is the stock level that triggers your next purchase order. Set it right and the new shipment arrives just as you're about to run out; set it wrong and you either stock out (costing sales) or carry excess inventory (costing cash).
Two formulas, one shape
Basic and advanced modes share the lead-time stock term; they differ only in how safety stock is computed:
Basic: ROP = D̄ × L + D̄ × S_days | Advanced: ROP = D̄ × L + Z × σ × √L
Worked example
Average demand 20 units/day, lead time 7 days, safety buffer 5 days:
- Lead-time stock = 20 × 7 = 140 units
- Safety stock = 20 × 5 = 100 units
- Reorder point = 140 + 100 = 240 units
- Place the next PO when inventory falls to 240
- Advanced (σ=5, 95% service): safety = 1.65 × 5 × √7 ≈ 22 → ROP 162
Practical tips
- Use the last 3 months of sales for average daily demand — older data drifts.
- Lead time is door-to-door, including customs clearance for imported goods.
- Service level 95% is the conventional B2C target; 99% for medical / pharma / critical SKUs.
- If demand is highly seasonal, recompute ROP each quarter — a single annual figure under-buffers peaks.
- Pair ROP with Economic Order Quantity (EOQ) — ROP tells you when, EOQ tells you how much.
Frequently Asked Questions
How do I find my average daily demand?
Take total units sold over the last 60–90 days and divide by the number of days. Exclude one-off promotions that artificially spiked sales.
What lead time should I use?
Door-to-door time — from issuing the PO to inventory being shelf-ready. Include supplier production time, shipping, and customs clearance for imports.
How many days of safety stock are enough?
5–7 days for low-variability demand; 10–14 days for irregular demand. The advanced (Z-score) mode does this math for you when you have demand std-dev data.
What's a service level?
The probability that you won't stock out during the next replenishment cycle. 95% means accepting a 5% chance of stocking out — typical for retail.
Does the reorder point change with promotions?
Yes — temporarily raise ROP before a promotion to absorb the demand spike, then revert.
When should I switch from basic to advanced mode?
When demand variability matters — e.g. a SKU that sells 5 some days and 50 on others. The basic formula assumes constant demand and will undershoot.
From the same drawer
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When you run the same sum every day
Invoicing every day? In Snad each invoice posts its entry and updates your stock automatically.
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