What is the reorder point formula?

Reorder point = (average daily demand × lead time in days) + safety stock. The first term covers expected usage while you wait for the order; safety stock covers variability so you do not stock out before it arrives.

Why add safety stock to lead-time demand?

Lead-time demand is only the average. Actual demand or lead time can run higher, and without a buffer you would stock out half the time. Safety stock raises the trigger so service stays at your target level.

How do I get the safety stock number?

You can enter it directly, or use the built-in option which applies Z × σ_demand × √lead-time, where Z is the service-level z-score. For a standalone buffer calculation, use the dedicated safety stock calculator.

What units and periods should I use?

Keep everything in the same time unit. If demand is per day, lead time must be in days. The reorder point comes out in the same units as demand (e.g. units), and you compare it against current on-hand inventory.

Does this assume continuous review?

Yes. The classic reorder point fits a continuous-review (Q,R) system where you reorder the moment on-hand crosses the point. For periodic review, raise the target to also cover the review interval between order opportunities.

Reorder Point Calculator

The reorder point is the on-hand inventory level that triggers a new purchase order — set it right and stock arrives just as you would otherwise run out. This calculator combines expected lead-time demand with safety stock, and can derive the safety stock for you from demand variability.

How it works

The reorder point is expected usage during the lead time plus a buffer:

lead-time demand = average daily demand × lead time (days)
reorder point    = lead-time demand + safety stock

If you opt to calculate safety stock here, it uses the standard formula with a service-level z-score:

safety stock = Z × σ_demand × √(lead time)

When on-hand inventory falls to the reorder point, you place an order; it arrives around the time stock would otherwise hit the safety-stock floor.

Example

Average daily demand 50 units, lead time 6 days, safety stock 80 units. Lead-time demand is 50 × 6 = 300; reorder point is 300 + 80 = 380 units. The moment on-hand inventory drops to 380, a replenishment order goes out.

Notes

Keep demand and lead time in the same time unit. This is a continuous-review trigger — for periodic review, add demand over the review interval too. Pair the reorder point with an economic order quantity to decide how much to order once the trigger fires.