Reorder Point Calculator
Find exactly when to reorder a material or finished product — no spreadsheet required.
Reorder Point = (Average Daily Usage × Lead Time) + Safety Stock
Reorder Point
90
units
Safety Stock Covers
2
days of usage
What a reorder point is
A reorder point is the stock level that triggers a new purchase order. Set it too low and you risk a stockout while waiting for the next shipment to arrive. Set it too high and you tie up cash in inventory sitting on the shelf. The formula balances the two by combining how fast you use the item, how long replenishment takes, and a buffer for the unexpected:
Reorder Point = (Average Daily Usage × Lead Time) + Safety Stock
How to estimate each input
- Average daily usage: total units consumed or sold over a recent period, divided by the number of days. Use 30–90 days of real history where possible, and lean on recent data if demand is trending or seasonal.
- Supplier lead time: the number of days from placing a purchase order to the stock actually being available to use — not just the ship date. Base it on your worst realistic case, not the supplier's quoted best case.
- Safety stock: an extra buffer of units held in reserve to absorb demand spikes or delivery delays. Start conservative for critical or hard-to-source items, and lower it once you have a track record of reliable lead times.
Worked example
Say you use 10 units of a component per day, your supplier takes 7 days to deliver, and you want a 20-unit safety buffer:
Reorder Point = (10 × 7) + 20 = 90 units
When stock on hand drops to 90 units, place the next purchase order. The 70 units covering the 7-day lead time will be consumed while you wait, leaving the 20-unit safety stock as a buffer if usage runs hot or the shipment is late.
Frequently asked questions
What is a reorder point?
A reorder point is the inventory level at which you should place a new purchase order so the replenishment arrives before you run out. It accounts for how much you use per day, how long the supplier takes to deliver, and a buffer of safety stock for demand spikes or delivery delays.
How do I find my average daily usage?
Take total units used (sold, consumed in production, etc.) over a recent period — 30 or 90 days works well — and divide by the number of days in that period. If usage is seasonal or trending up or down, weight toward more recent data rather than averaging over a full year.
What if my supplier lead times vary?
Use the longer lead time you've actually experienced, not the best case, or add extra safety stock to cover the difference. Nstock's AI reorder advisor automates this by learning from your real usage history and actual supplier delivery times, so the reorder point adjusts itself instead of relying on a static estimate.
Stop calculating this by hand
Nstock calculates this automatically from your real usage — no manual entry, no stale estimates. The AI reorder advisor watches actual consumption and supplier delivery history and tells you what to reorder and when.