Business Finance · Formula v1.0

Inventory Reorder Point Calculator

Calculate lead-time demand, safety stock and an inventory reorder point.

Use current demand variability and supplier performance. Enter supplier lead time in days. At the worked-example inputs, the reorder point is 960.3. The reorder point is the stock level at which you should place a new order so that you do not run out before it arrives. On the example, about 33 units sell each day, lead time demand is about 460 units, and adding 500 units of safety stock gives a reorder point of 960. Setting it too low risks stockouts, and too high ties up cash. Review it when demand or lead times change. It returns reorder point, average daily demand, lead-time demand before safety stock.

FreeNo sign-upInputs stay in-browserCSV exportReviewed August 17, 2026
LAST REVIEWEDAugust 17, 2026Inputs stay in your browser
Live calculation

Enter your numbers

Calculated result
Reorder point960.3
Average daily demand32.9
Lead-time demand before safety stock460.3
Sensitivity check

What if annual unit demand changes?

-10% input914.2
0% input960.3
+10% input1,006.3

Transparent method

The formula

Reorder point = average daily demand × lead time + safety stock

Worked example

Reorder point960.3
Average daily demand32.9
Lead-time demand before safety stock460.3

Example inputs

Annual unit demand12,000
Supplier lead time14.0 days
Safety stock500

How to interpret the result

A reorder point set from average demand alone runs out during any month that's busier than average, because the point is supposed to cover demand during the lead time it takes a new order to actually arrive. Average demand times average lead time leaves no room at all for a demand spike or a delayed shipment during that exposed window.

Before you rely on it

What to check

Confirm the safety-stock component reflects your actual demand variability and supplier reliability, not just a padded guess, since that's the piece doing the real protective work.

The common error

Where people go wrong with inventory reorder point calculator

Setting the reorder point using average demand and average lead time with no safety stock added. Half of all months run above average by definition, and any one of them can trigger a stockout before the next order arrives.

Sensitivity evidence

How annual unit demand changes the reorder point

Inventory Reorder Point Calculator: reorder point and average daily demand and lead-time demand before safety stock across a range of annual unit demand, every other input held at the worked-example value.
Annual unit demandReorder pointAverage daily demandLead-time demand before safety stock
9,600868.226.3368.2
10,800914.229.6414.2
12,000worked example960.332.9460.3
13,2001,006.336.2506.3
14,4001,052.339.5552.3

Every input, tested

Which input moves the reorder point most

Inventory Reorder Point Calculator: reorder point with each input moved on its own, every other input held at the worked-example value.
InputTested fromToReorder point at each endSwing
Safety stock450550910.3 to 1,010.3100 (10%)
Annual unit demand10,80013,200914.2 to 1,006.392.1 (9.6%)
Supplier lead time13.0 days15.0 days927.4 to 993.265.8 (6.8%)

Two variables at once

Reorder point by annual unit demand and supplier lead time

Inventory Reorder Point Calculator: reorder point at each combination of annual unit demand (rows) and supplier lead time (columns).
Annual unit demand \ Supplier lead time11.0 days14.0 days17.0 days
9,600789.3868.2947.1
10,800825.5914.21,003
12,000861.6960.31,058.9
13,200897.81,006.31,114.8
14,4009341,052.31,170.7

Step by step

The worked example, input by input

Worked-example inputs and the results they produce for the inventory reorder point calculator.
InputValue used
Annual unit demand12,000
Supplier lead time14.0 days
Safety stock500
Reorder point960.3
Average daily demand32.9
Lead-time demand before safety stock460.3

Where the inputs come from

Annual unit demand divided by 365 gives average daily demand. Supplier lead time is the number of days between placing an order and having it on the shelf, using the realistic figure rather than the quoted one, since delays are common. Safety stock is the extra inventory kept for demand or lead-time surprises; it can come from the safety stock calculator or from experience. Use consistent units for demand and lead time.

When the result stops applying

The calculation assumes steady demand, so seasonal or promotional spikes need a higher point at those times. Supplier reliability changes lead time, and a longer delay raises the required stock. It does not decide the order quantity, which is the economic order quantity's role. Items with lumpy demand need a different approach.

What to compare it with

Set the order size with the economic order quantity calculator, and derive the safety stock from a service level with the safety stock calculator. The inventory turnover and carrying cost pages show the cost of holding more. Review slow-moving items separately.

People also ask

Frequently asked questions

What is a reorder point?

The inventory level that triggers a new order, equal to the demand expected during the supplier's lead time plus safety stock.

What happens if lead time doubles?

Lead-time demand doubles, so the reorder point rises sharply. Track supplier performance and update the figure when delivery times change.

Why include safety stock?

It protects against demand higher than average or deliveries later than promised, which would otherwise cause stockouts.

Common business finance questions

Sources and evidence