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 stockIf 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.
Worked example
Suppose average daily demand is 50 units with a standard deviation of 10 units/day, and supplier lead time is 6 days. You want a 95% service level, which corresponds to a z-score of approximately 1.65.
lead-time demand = 50 × 6 = 300 units
safety stock = 1.65 × 10 × √6 ≈ 1.65 × 24.5 ≈ 40 units
reorder point = 300 + 40 = 340 unitsThe moment on-hand inventory drops to 340 units, you place a replenishment order. The stock arrives in about 6 days, at which point you would have consumed roughly 300 units and have 40 units (safety stock) remaining.
Service-level z-scores reference
| Service level | Z-score |
|---|---|
| 84% | 1.00 |
| 90% | 1.28 |
| 95% | 1.65 |
| 97.5% | 1.96 |
| 99% | 2.33 |
Higher service levels protect more reliably against stockouts but require larger safety stocks — there is always a cost to carrying that buffer inventory.
What can go wrong
Variable lead time. This calculator uses a fixed lead time. When lead time itself varies, the safety stock formula should account for both demand variability and lead-time variability, which requires a more complex calculation.
Non-stationary demand. If demand is trending or seasonal, a simple average may understate or overstate lead-time demand. Recalculate the reorder point each planning period using the most current demand estimate.
Multiple suppliers. If you can split orders across suppliers with different lead times, the trigger logic changes. The classic ROP is designed for a single-source continuous-review system.
Units mismatch. Keep demand and lead time in the same time unit throughout. If demand is per day, lead time must be in days; if weekly, lead time in weeks.
Using the reorder point together with order quantity
The reorder point answers when to order. The economic order quantity (EOQ) answers how much to order. In a classic (Q, R) system, you set both: when inventory hits the reorder point R, you place an order of size Q. This calculator focuses on R; for Q, use the dedicated EOQ calculator.