Reorder Point & Safety Stock Calculator
When to reorder, so you do not run out while the next order is on its way.
Projected stock on hand
- Stock on hand
- Reorder point
- Safety stock
The methods side by side
What each service level costs in stock
How this was calculated
About the Reorder Point & Safety Stock Calculator
The reorder point is the stock level at which to place the next order: enough stock to cover average demand while the order is on its way, plus safety stock for days when demand is higher or the delivery is late. Enter your average demand, the supplier’s lead time and how much they vary, choose a service level, and the calculator gives the safety stock and the reorder point — by five methods, with a table that compares them and one that shows what a higher service level costs in stock.
Add the stock you have and the calculator also works out how many days it lasts, the date to reorder, the date you would run out if nothing arrived, and a chart of the stock over the next order cycles. All of it runs in your browser.
How to use it
- Enter the average demand — per day, week or month — and the lead time: the days (or weeks) from placing an order to having the goods ready to sell.
- Choose a safety stock method. The statistical ones need the service level you want and the standard deviation of demand, of the lead time, or both; open Work out from past figures to get them from past sales and past deliveries.
- Or choose Fixed days of cover or the maximum minus average rule if you do not have the figures for a standard deviation.
- Optionally enter your stock on hand, stock already on order, the day you counted it and your usual order quantity, for the reorder and stockout dates, the fill rate and the projection.
- Read the reorder point, compare the methods and service levels in the tables, then copy the summary or download the tables as CSV.
Examples
Lead-time demand 50 × 9 = 450 Safety stock 1.645 × √(9 × 10² + 50² × 2²) = 1.645 × 104.4 = 171.7 Reorder point 621.7 → reorder at 622 units
Demand varies only: 1.645 × 10 × √9 = 49.3 → ROP 500 Lead time varies only: 1.645 × 2 × 50 = 164.5 → ROP 615 5 days of cover: 250 → ROP 700
Most of the safety stock here protects against late deliveries: a 2-day spread in lead time at 50 a day moves more stock than daily demand does.
18 days of stock at 50 a day Reorder in 5.6 days: (900 − 621.7) ÷ 50 Out of stock in 18 days if nothing arrives
Common uses
- Set reorder levels in an inventory app, a spreadsheet or a marketplace seller account.
- Decide how much buffer stock a slow or unreliable supplier costs you.
- Check whether a stock count means you must reorder today.
- Show a buyer or a manager what a 99% service level would cost in stock.
The reorder point formula
Reorder point = average daily demand × lead time in days + safety stock
The first part is the stock an average lead time uses up. The safety stock absorbs the rest: busier days and late deliveries. Compare the reorder point with your inventory position — stock on hand plus stock already on order, less orders you owe customers — not with the stock on the shelf alone, or an order that is already coming triggers a second one. This is the order-point (s, Q) system of Silver, Pyke and Thomas’s Inventory and Production Management in Supply Chains, and the reorder point and safety stock as the ASCM (APICS) Dictionary defines them.
If you only check stock every few days, order as soon as you see the position at or below the point and add the days between checks to the lead time (the review period plus the lead time is the time the stock must cover).
Five ways to set safety stock
- Demand and lead time both vary:
Z × √(L × σd² + d² × σL²). The usual choice when both change from one order to the next; it assumes demand and lead time are independent. - Demand varies:
Z × σd × √L. For a supplier who delivers on time; the spread of daily demand grows with the square root of the days it adds up over. - Lead time varies:
Z × σL × d. For steady demand and an unreliable delivery date. - Fixed days of cover:
d × days. Simple and common when no history is kept; the page shows the service level it gives when you enter a standard deviation. - Maximum minus average:
highest daily demand × longest lead time − d × L. A rule of thumb with no service level behind it: it covers the worst week and the latest delivery at the same time, which rarely happen together, so it usually holds more stock than the statistical methods.
d is the average demand a day, L the average lead time in days, σd and σL their standard deviations, and Z the number of standard deviations the service level needs.
Service level and Z
The cycle service level is the chance of not running out while an order is on its way. Z is the point of the standard normal distribution with that much probability below it: 90% → 1.282, 95% → 1.645, 97.5% → 1.960, 99% → 2.326, 99.9% → 3.090 (the NIST/SEMATECH table of the standard normal distribution gives the same areas).
Each step up costs more stock for less gain: in the example, going from 95% to 99% adds 71 units of safety stock, from 99% to 99.9% another 80. The service-level table shows this for your item.
A 95% cycle service level does not mean 5% of demand goes unmet. Most cycles end without a shortage and the ones that run short miss a few units, so the fill rate — the share of demand served from stock — is higher. Enter your order quantity to see it: fill rate = 1 − σ × [G(k) − G(k + Q ÷ σ)] ÷ Q, where σ is the standard deviation of lead-time demand, k the safety stock in standard deviations (Z for the statistical methods), Q the order quantity and G the unit normal loss function. Unless Q is small next to σ, the second G is close to 0 and the familiar 1 − σ × G(k) ÷ Q gives the same answer.
Where the standard deviations come from
Open Work out from past figures and paste a column of past demand (per day, week or month, the period you chose) and a column of past lead times in days; the calculator fills in the average and the sample standard deviation. Twelve or more figures give a steadier estimate than three or four.
Demand per week or month is turned into demand per day: a week has 7 days and a month 365 ÷ 12 = 30.42, and the standard deviation is divided by the square root of those days, which assumes one day’s demand does not depend on another’s. If demand has a trend or a season, the spread around the average overstates the uncertainty: use the spread of your forecast errors instead.
Days of stock left and the dates
With the stock counted on a given day, the calculator assumes average demand from then on: days of stock left = stock on hand ÷ daily demand, the reorder date is when stock on hand plus on order falls to the reorder point, and the stockout date is when the shelf would be empty if nothing arrived. Days are calendar days; enter demand per calendar day too. The chart shows what happens if you order your usual quantity each time the position reaches the reorder point: with average demand each order arrives just as the stock reaches the safety stock.
Limitations
- The statistical methods assume demand during the lead time follows a normal distribution. For slow movers that sell a few units a month, it can mislead: use a fixed number of units or a distribution made for low counts.
- Demand and lead time are taken as independent and stable. Promotions, seasons and trends change them; recalculate when they do.
- The dates and the chart assume average demand every day from the count; they are a plan, not a forecast.
- The order quantity is yours to choose: the EOQ calculator works out the cheapest one.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
What is the reorder point formula?
Reorder point = average daily demand × lead time in days + safety stock. With 50 units a day, a 9-day lead time and 172 units of safety stock, you reorder when stock on hand plus stock on order falls to 450 + 172 = 622 units.
What service level should I choose?
It is a business decision: weigh the cost of a lost sale or an angry customer against the cost of holding more stock. Many businesses set higher levels for their best sellers and lower ones for items customers can wait for. The service-level table shows how much safety stock each level needs, so you can see what each step costs.
Is safety stock the same as the reorder point?
No. Safety stock is the buffer you plan to still have when an order arrives on an average day; the reorder point is that buffer plus the demand expected during the lead time. Safety stock is part of the reorder point.
What if I only check stock once a week?
Then a shortage can start up to a week before you notice it. Add the time between checks to the lead time — a 9-day lead time with weekly checks becomes 16 days — and use the result as your reorder point.
How do I find the standard deviation of demand?
Paste your past sales into Work out from past figures: one figure per day, week or month. The calculator works out the average and the sample standard deviation and puts them in the form. A spreadsheet’s STDEV.S gives the same standard deviation.
Why is the reorder point rounded up?
Stock comes in whole units, and rounding down would give slightly less protection than the service level you chose. The exact figures are in the formula section.