FreightMathsโ€บ Warehousing & Fulfillmentโ€บ Reorder Point Calculator

Reorder Point Calculator โ€” When to Trigger a Purchase Order

Calculate the exact reorder point for each SKU. Know when to trigger a purchase order so stock arrives before you run out, even accounting for demand variability and lead time uncertainty.

Quick answer: Reorder Point = (Average Daily Demand ร— Lead Time) + Safety Stock. For 50 units/day demand, 14-day lead time, and 93-unit safety stock: ROP = 793 units โ€” order when inventory hits this level.

๐Ÿ”” Reorder Point Calculator

If unknown, use 30โ€“40% of average demand
How variable is your supplier lead time?
Optional โ€” to see days until reorder point hit
Reorder Point
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Safety Stock Component
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Days Until Reorder Triggered
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How to Use This Calculator

  1. Enter average daily demand and variability โ€” use 13-week rolling average for demand; standard deviation from demand history.
  2. Enter lead time and its variability โ€” average days from PO to receipt. If lead time is also variable, include its std dev for a more accurate ROP.
  3. Enter current stock โ€” to see how many days until you hit the reorder point and should place a purchase order.

Worked Example

50 units/day demand, ฯƒ15, 14-day lead time, ฯƒ3, 95% service level, 850 units on hand.

  1. Safety stock: 1.65 ร— โˆš(14ร—225 + 2500ร—9) = 1.65 ร— โˆš(3150+22500) = 1.65 ร— 160.2 = 265 units
  2. Cycle stock: 50 ร— 14 = 700 units
  3. ROP: 700 + 265 = 965 units
  4. Days to ROP: (850 โˆ’ 965) รท 50 = โˆ’2.3 (already below ROP โ€” order now!)

Including lead time variability significantly increases the ROP vs a simple formula. If your supplier sometimes delivers in 11 days and sometimes in 17 days (ฯƒ=3), you need substantially more safety stock to maintain service levels.

Frequently Asked Questions

Safety stock is the buffer against variability (demand spikes, late deliveries). ROP is the total inventory level that triggers a purchase order โ€” it includes both the expected consumption during lead time (cycle stock) AND the safety stock. ROP = Cycle Stock + Safety Stock. You should always have at least safety stock on hand when your new order arrives.

Monthly for fast-moving A-items with variable demand. Quarterly for B-items. Annually for slow-moving C-items. Recalculate immediately after significant demand changes, supplier changes, or lead time shifts. Most WMS/ERP systems can automate this calculation if fed with current demand statistics.