Reorder points balance the cost of holding stock against the risk of stockouts.
How to use the Reorder Point Calculator
- Average daily demand
- Standard deviation of daily demand
- Lead time
- Service level
Results update as you type, and every field accepts the units shown in its menu.
How it works
Expected demand during the lead time is added to a safety buffer sized for the service level you want.
Inputs explained
| Field | What to enter |
|---|---|
| Average daily demand | In units |
| Standard deviation of daily demand | In units |
| Lead time | In days |
| Service level | Choose one: 90%, 95%, 98%, 99% |
What each result means
- Safety stock = [Service level]×[Standard deviation of daily demand]×sqrt([Lead time])
- Reorder point = [Average daily demand]×[Lead time] + [Safety stock]
Example values
How the main result changes when Average daily demand changes and everything else stays at the example values above:
| Average daily demand (units) | Reorder point (units) |
|---|---|
| 20 | 175 |
| 30 | 245 |
| 40 | 315 |
| 50 | 385 |
| 60 | 455 |
| 80 | 595 |
Formula
Safety stock = z × σ_demand × √lead timeReorder point = daily demand × lead time + safety stockWorked example
Inputs — Average daily demand: 40 units; Standard deviation of daily demand: 8 units; Lead time: 7 days; Service level: 95%.
Results — Safety stock = 35 units; Reorder point = 315 units.
Frequently asked questions
What if lead time varies too?
Add a term for lead-time variability to the safety stock formula.
What is a service level?
The probability of not running out during a replenishment cycle.
What formula does the Reorder Point Calculator use?
Safety stock = z × σ_demand × √lead time.