A reorder point (ROP) is the trigger level for replenishment: when the stock on hand falls to it, you order. It has to cover the demand that arrives while you wait for the delivery (the lead-time demand) plus a safety buffer for sales that run above average or deliveries that come late. Set it too low and you run out; too high and cash sits on the shelf, which matters most for perishable or fashionable goods.
The calculator offers three methods. The statistical method (the default) sizes safety stock from the standard deviation of daily demand and the service level you want (the probability of not running out during a replenishment cycle). The days-of-stock method, popular in small retail, simply adds the days of basic stock and safety stock you want to keep to the lead time and multiplies by daily sales. The third method also allows for suppliers whose lead time varies.
Besides the reorder point you get the safety stock, the lead-time demand and how many days of sales the reorder point covers.
How to use the Reorder Point Calculator
- Method
- Average daily demand (unit sales per day)
- Standard deviation of daily demand
- Lead time
- Standard deviation of lead time
- Service level
- Basic stock to keep
- Safety stock
Results update as you type, every field has its own unit menu, and everything is calculated in your browser.
How it works
Lead-time demand is daily demand × lead time. Safety stock is z × σ × √L for demand variability, adds d² × σ_L² under the root for lead-time variability, or is a number of days of sales in the simple method. The reorder point adds them.
Worked example
Daily demand 40 units (σ = 8), lead time 7 days, 95% service level: safety stock = 1.645 × 8 × √7 = 34.8 ≈ 35 units; lead-time demand = 280; reorder point = 315 units, about 7.9 days of sales. With the days-of-stock method, a shop selling 10 bottles a day that keeps 10 days of basic stock and 2 days of safety stock with a 1-day lead time reorders at (10 + 2 + 1) × 10 = 130 bottles.
z-values for common service levels
| Service level | z |
|---|---|
| 90% | 1.28 |
| 95% | 1.645 |
| 97.5% | 1.96 |
| 98% | 2.05 |
| 99% | 2.33 |
| 99.9% | 3.09 |
Tips
- Measure the longest points of the package, including bulges.
- Check your carrier’s current divisor and rounding rules.
- Every field has a unit menu: cm, inches, kg and lb all work.
- Everything is calculated in your browser.
Common mistakes to avoid
- Using the wrong dimensional divisor for the carrier or service.
- Forgetting pallet height and overhang limits.
- Rounding dimensions down instead of up.
Inputs explained
| Field | What to enter |
|---|---|
| Method | Choose one: Statistical safety stock (service level), Days of stock (basic + safety stock in days), Statistical, with variable lead time |
| Average daily demand (unit sales per day) | In units |
| Standard deviation of daily demand | In units |
| Lead time | Units: days, weeks, months |
| Standard deviation of lead time | Units: days, weeks, months |
| Service level | Choose one: 90%, 95%, 97.5%, 98% … |
| Basic stock to keep | Units: days, weeks, months |
| Safety stock | Units: days, weeks, months |
Formula
ROP = demand per day × lead time + safety stock · Days method: ROP = (basic stock days + safety days + lead time) × daily sales · Safety stock = z × σ_d × √L · with lead-time variability: z × √(L σ_d² + d² σ_L²)
Worked example
Inputs: Method: Statistical safety stock (service level); Average daily demand (unit sales per day): 40 units; Standard deviation of daily demand: 8 units; Lead time: 7 days; Service level: 95%.
Results: Safety stock = 35 units; Lead-time demand = 280 units; Reorder point = 315 units; Days of sales covered by the reorder point = 7.9 days; Safety stock in days of sales = 0.9 days.
Key terms
- Lead time
- Days between placing an order and receiving it.
- Safety stock
- Extra stock that protects against higher demand or late delivery.
- Service level
- Probability of not running out during a replenishment cycle.
- Lead-time demand
- Expected sales during the lead time.
Frequently asked questions
What is a reorder point?
The stock level at which you place a new order so it arrives before you run out: demand during the lead time plus safety stock.
How do I calculate safety stock?
z × standard deviation of daily demand × √lead time. With z = 1.645 (95%), σ = 8 and 7 days: 1.645 × 8 × 2.65 ≈ 35 units.
What service level should I use?
95% is common; 98–99% for critical items; 90% for cheap, easily substituted goods.
What if the supplier's lead time varies?
Use the third method, which adds d² × σ_L² under the square root.
What is the days-of-stock method?
ROP = (basic stock days + safety days + lead time) × daily sales. A shop selling 10 bottles a day with 10 + 2 + 1 days orders at 130 bottles.
Is the reorder point the same as the order quantity?
No, the ROP says when to order; the economic order quantity (EOQ) says how much.