Reorder point calculator: when to order before you run out
The reorder point formula is simple: reorder point = average daily demand × lead time in days + safety stock. This calculator runs it on your numbers, and works out the safety stock for you from how much your daily sales swing and the service level you want. Every z-value it uses is shown below.
Units sold per day for this SKU, averaged over a recent period that reflects normal trading.
Days from placing the order to stock being sellable: supplier, freight, receiving.
The standard deviation of daily unit sales over the same period (STDEV in a spreadsheet). Service level is the chance of not running out while an order is on its way.
Your own buffer, if you already hold one.
Units available to sell now, to see how far away the reorder point is. Set to 0 to skip.
Place the order when stock falls to 634 units. With 900 on hand, that is about 6.7 days away.
The reorder point formula, with the buffer shown
The first half covers what you expect to sell while the order is on its way. The second half, safety stock, covers the days when sales run above average. Without it, you run out on roughly half of your replenishment cycles, because average demand is exceeded about half the time.
z-values used: 90% = 1.28, 95% = 1.645, 97.5% = 1.96, 99% = 2.33, from the standard normal distribution. The safety stock formula assumes daily demand is roughly normal and independent from day to day, and that lead time is fixed. If your lead time also varies, you need more buffer than this shows, so treat the result as a minimum. Safety stock is rounded up to a whole unit.
The defaults are demonstrative numbers, not a benchmark. Change a number in the calculator and this example follows.
A buffer costs cash. A stockout costs sales
Every unit of safety stock is money sitting on a shelf. Choose the service level per product, not one number for the whole range.
Service level is a price
Moving from 95% to 99% raises z from 1.645 to 2.33, so safety stock grows by about 42% for the same demand. Worth it on a hero SKU, rarely on a slow mover.
Averages hide seasons
A 90-day average spread across a peak and a lull fits neither. Re-run the reorder point when demand shifts, or feed it a demand forecast instead of history.
Reorder point is not order size
This tells you when to order, not how much. Order quantity depends on your review cycle, supplier minimums and working capital.
Questions operators ask
Reorder point = average daily demand × lead time in days + safety stock. With 40 units a day, a 14-day lead time and 74 units of safety stock, the reorder point is 560 + 74 = 634 units. When stock on hand falls to 634, you place the order, and the buffer covers days when sales run above average before the delivery lands.
A common formula is safety stock = z × standard deviation of daily demand × the square root of lead time in days. The z-value sets the service level: 1.28 for 90%, 1.645 for 95%, 1.96 for 97.5% and 2.33 for 99%. It assumes lead time is fixed. If your supplier's lead time varies, add buffer on top.
Match it to what a stockout costs. A best-selling SKU that drives first orders earns a high level; a slow mover that risks becoming dead stock earns a lower one. Many teams group SKUs with ABC analysis and give each group its own level instead of one blanket number.
Days of cover is stock on hand divided by daily demand: how long current stock lasts. The reorder point is the stock level where you must act. Read them together: when days of cover falls to lead time plus the safety buffer, you are at the reorder point.
Reorder before the stockout, not after
This page runs one SKU with one average. Blufire S7 Products / Inventory / Returns lets you watch days-of-cover and reorder before the stockout, with every SKU placed on the ABC x XYZ matrix, so the buy list starts from margin, not just from units.