EOQ answers how much to order; reorder point answers when — the inventory level that should trigger placing that next order.
How it works
Average daily demand multiplied by lead time gives the demand expected to occur while waiting for a new order to arrive. Adding safety stock — a buffer against demand spikes or delayed shipments — gives the reorder point.
What this does not include
This uses average daily demand — a business with highly variable demand should size safety stock using a statistical approach (like a service-level target against demand variability) rather than a flat buffer, a refinement this calculator’s simple addition doesn’t compute.
How to use this calculator
- Enter average daily demand, lead time in days, and safety stock.
A worked example
Average daily demand 100 units, 7-day lead time, 200-unit safety stock: demand during lead time = 100×7 = 700, reorder point = 700 + 200 = 900 units.
Same demand and lead time, zero safety stock: reorder point = 700 units — no buffer against demand spikes or supply delays.
What the variables mean
| Variable | Meaning |
|---|---|
| Average daily demand | Typical units sold or used per day |
| Lead time | Days between placing an order and receiving it |
| Safety stock | Extra buffer inventory to guard against demand or supply variability |
Edge cases worth knowing
Safety stock exists to absorb uncertainty, not to cover expected demand. Expected demand during lead time is already covered by the base calculation — safety stock is the cushion for when reality deviates from that average.
A negative safety stock has no meaning, so the calculator declines to show a result for that input.
Frequently asked questions
What happens with zero safety stock?
The reorder point exactly matches expected demand during lead time — any demand spike or shipment delay risks a stockout before the new order arrives.
How does lead time affect the reorder point?
Directly and linearly — a longer lead time means more demand accumulates before the new order arrives, requiring a higher reorder point to avoid running out.
Should reorder point be recalculated regularly?
Yes — as demand patterns or supplier lead times change, the reorder point should be updated to reflect current conditions rather than treated as fixed.
