A reorder point is the stock level that tells you it is time to place the next order. The formula is: reorder point = (average daily usage x average lead time in days) + safety stock. Enter your daily usage and lead time in the calculator below, add safety stock and your current stock if you have them, and it returns your reorder point and how many days you have until you reach it. Read on for a worked example and when one number is not enough.
A free tool to work out when to reorder, so the next delivery lands before the shelf is empty.
Running out of a product rarely comes from forgetting to order altogether. It comes from ordering a few days too late: the stock you had left was not enough to cover the week or two the supplier needed to deliver. A reorder point fixes that by turning "order soon" into a specific number. When stock falls to that level, you order, and the stock you still have covers you until the new delivery arrives.
Most people who search for a reorder point calculator want a number for a specific product right now, so the tool comes first and the explanation second. There is also an honest section below on when this simple calculation is all you need.
Reorder point calculator
How to use the reorder point calculator
The calculator takes two required figures and two optional ones:
- Average daily usage: the number of units you typically sell or consume in a day.
- Average lead time (days): how long a replenishment order usually takes to arrive, from the day you place it to the day the stock is ready to sell.
- Safety stock (optional): the extra buffer you hold for busy weeks and late deliveries. Leave it blank or at zero if you do not hold one.
- Current stock on hand (optional): how many units you have right now. Add it and the calculator tells you whether to reorder now or roughly how many days you have until you reach your reorder point.
It returns three things: your lead-time demand (the stock you expect to use while an order is on its way), your reorder point, and, if you entered your current stock, a status that reads either "Reorder now" or about how many days remain until you hit the reorder point. The calculator opens with an example already filled in; replace the figures with your own for each product.
What is a reorder point and how do you calculate it?
A reorder point is the stock level at which you place a replenishment order. The Qoblex reorder point guide covers the idea in more depth; the short version is that it has two parts: the stock you will burn through while you wait for the delivery, and a buffer on top for the days that do not go to plan.
Reorder point = (average daily usage x average lead time in days) + safety stock
The first part, average daily usage multiplied by average lead time, is called lead-time demand. It is how much you expect to sell between placing the order and receiving it. The safety stock on top covers a busier than usual stretch or a delivery that runs late. If you do not hold safety stock, your reorder point is just your lead-time demand, and any delay or spike in sales means a stockout.
Worked example, step by step
Say a product moves as follows:
- Average daily usage: 50 units.
- Average lead time: 10 days.
- Safety stock: 300 units.
- Current stock on hand: 1,200 units.
Work out the lead-time demand first. You sell 50 units a day and a delivery takes 10 days, so you expect to use 50 x 10 = 500 units while you wait.
Lead-time demand = 50 x 10 = 500 units.
Now add the safety stock to get the reorder point:
Reorder point = 500 + 300 = 800 units.
So you place the next order when stock falls to 800 units. You have 1,200 on hand, which is 400 units above the reorder point. At 50 units a day, that is 400 / 50 = 8 days until you need to order. These are the figures the calculator above opens with, so you should see a lead-time demand of 500, a reorder point of 800, and about 8 days until you reach it.
How the reorder point relates to safety stock and EOQ
The reorder point is one of three numbers that work together, and it helps to keep them apart.
Safety stock is the buffer inside the reorder point. It is the extra stock you hold so a busy week or a slow supplier does not empty the shelf before the order arrives. If you do not have a safety stock figure yet, the safety stock calculator sizes one from your maximum and average usage and lead times, then feed the result into this calculator.
EOQ is how much; the reorder point is when. The reorder point tells you the moment to place an order. It says nothing about how many units to order. That is the job of economic order quantity: the EOQ calculator works out the order size that balances the cost of placing orders against the cost of holding stock. Use the reorder point to decide when to order and EOQ to decide how much, and you have both halves of a replenishment plan.
How to estimate average daily usage and lead time
The calculation is only as good as the two figures you feed it, so it is worth a few minutes to get them right.
Average daily usage. Take the units sold (or consumed, for materials) over a recent period and divide by the number of days in it. Ninety days is a sensible default: long enough to smooth out a single odd week, short enough to reflect how the product sells now. If the item was out of stock for part of that period, leave those days out, or your average will understate real demand.
Average lead time. Look at your last several purchase orders from the supplier and measure the days from placing each order to having the stock ready to sell. Include the time it takes to receive and put the stock away, not just the shipping. If you have only a quoted lead time, use it for now, then replace it with your actual figures once you have a few orders' history.
When a single reorder point is not enough
A fixed reorder point assumes that usage and lead time stay roughly the same from month to month. Two common situations break that assumption.
Seasonal demand. If a product sells three times as fast in November as it does in March, one reorder point will be too low in the busy season and too high in the quiet one. Calculate a separate reorder point for each season using that season's daily usage, and switch between them as the pattern changes.
Variable lead times. If a supplier sometimes delivers in a week and sometimes in three, the average lead time hides the risk. That variation belongs in your safety stock, which is exactly what the max/average method in the safety stock calculator is for. A bigger buffer raises the reorder point, so you order earlier and a slow delivery does not catch you out.
When is a spreadsheet or this calculator enough?
For a small range of products with steady sales and reliable suppliers, working out reorder points with this calculator, or in a simple spreadsheet, is often all you need. Calculate the number once per product, write it down, and check your stock against it regularly. Plenty of businesses run this way for years.
It starts to strain when the product count grows, when you sell across several channels, or when stock changes faster than you can check it. The reorder point itself is easy to calculate; the hard part is noticing, product by product, the moment stock actually reaches it, and keeping the number current as usage and lead times drift.
How Qoblex helps with reorder points
The calculator above is a planning aid you drive by hand. It works out the number; watching every product against that number as the business runs is where an inventory system earns its place.
Qoblex tracks stock and sales velocity so you can set and watch these levels. It does not decide your reorder point for you. You set a reorder point on each variant, using the figure from this calculator, and the Reorder Inventory report lists everything that has reached it. Pick the suppliers, and purchase orders are raised from the report itself, so you hear about it while there is still time to order.
Your accounting platform stays your book of record. Qoblex handles the operational side, the stock levels, sales velocity and purchasing, while QuickBooks Online or Xero keeps the ledger. For current plans, see qoblex.com/pricing.
FAQ
What is a reorder point? A reorder point is the stock level at which you place the next replenishment order. It is set high enough to cover the stock you will use while the order is on its way, plus any safety stock you hold as a buffer, so the new stock lands before you run out.
How do you calculate a reorder point? Reorder point = (average daily usage x average lead time in days) + safety stock. The first part is your lead-time demand, the stock you expect to use while you wait for a delivery. The safety stock on top is the cushion for the days that do not go to plan. If you hold no safety stock, the reorder point is simply the lead-time demand.
What is the difference between the reorder point and safety stock? Safety stock is the buffer; the reorder point is the trigger. Safety stock is the extra stock you hold to cover busy weeks and late deliveries, and it is one part of the reorder point. The reorder point adds your lead-time demand on top, and tells you when to place the order.
What is the difference between the reorder point and EOQ? The reorder point tells you when to order; economic order quantity (EOQ) tells you how much to order. You need both: the reorder point stops you ordering too late, and EOQ stops you ordering too often or too much at a time.
How often should I recalculate my reorder point? Whenever your usage or lead times change noticeably, and at least every few months for items that sell steadily. Seasonal products need a different reorder point for the busy and quiet parts of the year, and a supplier whose lead times have crept up needs a higher one.
Does Qoblex calculate reorder points for me? Qoblex does not set your reorder point number automatically. You set a reorder point on each variant, and the Reorder Inventory report lists everything that has reached it, so you can pick the suppliers and raise purchase orders from the report itself. The number is yours to set; this calculator helps you work it out.