What is the reorder point?

The reorder point is the on-hand inventory level that should trigger a new purchase order. When stock drops to this level, you reorder — so a replenishment arrives just as you would otherwise run out.

What is the difference between reorder point and safety stock?

Safety stock is only the buffer for variability. The reorder point is larger — it adds the stock you expect to consume during the lead time on top of that buffer, so it is the actual level at which you place the order.

Reorder Point Calculator

Q: How do you calculate the reorder point?

Reorder point = demand during lead time + safety stock. Demand during lead time is average daily demand multiplied by the average lead time in days; safety stock is the buffer that absorbs demand and lead-time variability.

Find the on-hand level that should trigger your next order. It’s the stock you’ll burn through while you wait on the replenishment, plus your safety-stock buffer. Enter a safety stock you already know, or estimate it from a target service level.

Average demand (units/day)

Average lead time (days)

Safety stock (units)

Average demand (units/day)

Std dev of daily demand

Average lead time (days)

Std dev of lead time (days, optional)

Target service level

Reorder point

units — order when stock hits this level

Safety stock —

What the reorder point is

The reorder point (ROP) is the on-hand level that tells you when to place your next order. Drop to it and you reorder; the new stock lands just as you’d otherwise run dry. It has two parts — the stock you’ll consume while you wait, and the buffer that covers the days things don’t go to plan.

Reorder point = (average demand × lead time) + safety stock

Demand during lead time

The first piece is demand during lead time — average daily demand multiplied by the average lead time in days. If you sell 100 units a day and replenishment takes 5 days, you’ll burn through 500 units before the order arrives. That’s the stock the reorder point has to cover before any safety margin.

Adding safety stock

Average demand and an average lead time rarely both hold. Safety stock is the cushion for the days demand spikes or the truck runs late. Enter a number you already track, or switch to Estimate from service level and this tool sizes it for a target service level using the variability of demand and lead time — the same math as the dedicated Safety Stock calculator.

Safety stock tells you how much buffer to hold; the reorder point tells you when to pull the trigger.