What this tool does
Finds the stock level at which you should place a new order: average daily demand times lead time, plus safety stock.
How to use it
- Enter average units sold per day.
- Enter lead time in days, from order to receipt.
- Enter safety stock in units.
- Run it to get the reorder point.
Worked example
Fifty units a day, a seven-day lead time, and 100 units of safety stock give 50 × 7 + 100 = 450. Order when stock falls to 450.
Calculation method
Reorder point
demand*lead+safetyFrequently asked questions
- How do I set safety stock?
- This tool does not compute it. Decide how much demand variability and supplier delay you want to absorb, and enter that. Past stockout history is a common basis.
- Can I work in weeks?
- Yes, as long as demand and lead time use the same unit. Multiply weekly demand by lead time in weeks.
What this tool does not cover
The model assumes steady demand and lead time. Seasonality, minimum order quantities, supplier shutdowns, and volume discounts are not reflected.