How to set a reorder point
Combine demand, lead time and buffer stock.
Enter demand
Use average daily units sold over a recent representative period.
Add the lead time
Use the realistic supplier lead time, not the best case.
Add safety stock
The buffer covers delays and demand spikes until the next delivery arrives.
What does this tool do?
The reorder point is the inventory balance at which replenishment must start so the next delivery arrives before stock runs out. It combines expected demand during the supplier lead time with a safety buffer.
The Formula
Reorder point = (Average daily demand × Lead time in days) + Safety stockFrequently Asked Questions
Is the reorder point the same as safety stock?
No. Safety stock is the buffer held against uncertainty, while the reorder point is the total stock level that triggers an order: lead-time demand plus safety stock.
What if demand changes through the year?
Recalculate with a forward-looking demand rate for the coming lead time. For seasonal products, use the demand expected in the next few weeks rather than an annual average.