Reorder Point Calculator
Quick answer: Reorder point = average daily demand × lead time + safety stock, where safety stock = z × daily demand standard deviation × √lead time (z comes from your service level). When inventory on hand falls to the reorder point, place your order. Example: 50 units/day demand, 10-day lead time, daily std dev 8, 95% service level → reorder point of 542 units.
Enter your average daily demand, supplier lead time, daily demand variability, and target service level to get your demand during lead time, safety stock, and reorder point — the inventory level at which you must reorder. Instant recalculation as you type.
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How to use this calculator
Enter your average daily demand and how many days it takes a supplier to deliver (lead time), then add the daily standard deviation of demand from your sales history and pick a service level. The reorder point updates instantly.
When your inventory position (on hand plus on order) drops to the reorder point, place your order immediately — the reorder point already includes the safety stock buffer for demand spikes.
How this is calculated
Definitions: avg demand = average units sold per day, lead time = supplier lead time in days, σ = daily demand standard deviation, z = standard-normal z-score for the chosen service level.
- Demand during lead time = avg demand × lead time
- Safety stock = z × σ × √lead time
- Reorder point (ROP) = demand during lead time + safety stock, rounded up to the next whole unit
Assumptions: daily demand is approximately normally distributed and independent across days; lead time is constant; no minimum order quantity. Estimates for planning, not inventory-management advice.
Worked example
Demand 50 units/day, lead time 10 days, daily std dev 8, 95% service level (z = 1.65): demand during lead time = 50 × 10 = 500 units. Safety stock = 1.65 × 8 × √10 = 1.65 × 8 × 3.1623 = 41.7 units. Reorder point = 500 + 41.7 = 541.7, rounded up to 542 units.
Reference data
| Service level | z-score |
|---|---|
| 90% | 1.28 |
| 95% | 1.65 |
| 97.5% | 1.96 |
| 99% | 2.33 |
| 99.9% | 3.09 |
Source: standard normal distribution — statistical constants (exact mathematical values, not an estimate).
Method & sources
The reorder-point formula is the standard textbook inventory formula (ROP = expected demand during lead time + safety stock), with the safety stock set so that the probability of covering demand during lead time equals the service level, under the normal-distribution assumption. z-scores are exact quantiles of the standard normal distribution.
Frequently asked questions
What is the difference between reorder point and EOQ?
The reorder point tells you WHEN to place an order — the inventory level that triggers a new purchase so stock arrives before you run out. EOQ (economic order quantity) tells you HOW MUCH to order each time to minimize ordering and holding costs. The two work together: reorder point triggers the order, EOQ sizes it.
What if my demand is seasonal?
The standard reorder-point formula uses average daily demand, so it fits steadier demand best. For seasonal products, recalculate the reorder point separately for each season using that season's average demand and standard deviation, and switch values when the season changes. You can also raise the service level during peak season to carry a larger safety buffer.
Why does safety stock grow with the square root of lead time?
Demand uncertainty compounds over time: the variance of total demand during lead time grows linearly with the number of days, so the standard deviation (which is the square root of variance) grows with the square root of lead time. Doubling lead time from 10 to 20 days multiplies safety stock by about 1.41, not 2. That is why the formula is safety stock = z × σ × √lead time.
What service level should I choose?
95% is a common starting point for most stock items — it means you accept a 5% chance of stocking out during any lead-time cycle. Use 99% or higher for critical or high-margin items where a stockout is expensive, and 90% for low-value items where carrying extra safety stock costs more than an occasional stockout. Treat this as a planning guideline, not a rule.