Reorder Point Calculator

What is Reorder Point?

The Reorder Point (ROP) is the inventory level at which you should place a new purchase order to replenish stock. When your inventory drops to this level, it triggers a reorder to ensure you receive new stock before running out.

The reorder point accounts for two key factors:

• Lead Time Demand: The inventory you will consume while waiting for the new order to arrive
• Safety Stock: Buffer inventory to protect against unexpected demand spikes or supply delays

The Formula

Reorder Point = (Average Daily Demand x Lead Time) + Safety Stock

Or expressed as:

ROP = (D x LT) + SS

Where:

• D = Average daily demand (units per day)
• LT = Lead time in days
• SS = Safety stock (buffer inventory)

How to Determine Your Inputs

Average Daily Demand: Calculate the average units sold per day over a representative period (e.g., last 90 days). In Excel: =AVERAGE(daily_sales_range)

Lead Time: The total time from when you place an order until it arrives and is ready for sale. Include:

• Order processing time
• Supplier production time
• Shipping and transit time
• Receiving and inspection time

Safety Stock: Either use a predetermined amount or calculate it based on demand variability and your desired service level. Use our Safety Stock Calculator for detailed calculations.

Reorder Point vs Safety Stock Calculator

Calculator	Purpose	When to Use
Reorder Point	Tells you WHEN to order	Setting up inventory alerts and purchase triggers
Safety Stock	Tells you HOW MUCH buffer to keep	Determining optimal buffer inventory levels

These two metrics work together: Safety stock is a component of your reorder point calculation. Many businesses use the safety stock calculator first, then plug that result into the reorder point calculator.

Example Calculation

A retailer sells an average of 50 units per day. Their supplier takes 10 days to deliver, and they maintain 100 units of safety stock.

• Lead Time Demand = 50 units/day x 10 days = 500 units
• Reorder Point = 500 + 100 = 600 units

When inventory drops to 600 units, they place a new order. The 500 units cover expected demand during the 10-day lead time, while the 100 units of safety stock protect against variability.

Need More Than a Calculator?

This calculator gives you a quick answer, but real inventory optimization requires:

• Automated reorder point calculations across all your SKUs
• Real-time inventory monitoring with automatic alerts
• Dynamic adjustments based on seasonality and trends
• Integration with your ERP and procurement systems

Get a free assessment to see how Flair Group can automate this for your entire inventory.