How to calculate a reorder point
The reorder point is average daily demand multiplied by lead time in days, plus safety stock. Order when stock on hand falls to that level.
Skip the maths and use the reorder point calculator
The formula
Reorder point = average daily demand × lead time (days) + safety stock.
Step by step
- Find average daily demand.
- Find supplier lead time in days.
- Multiply them for lead-time demand.
- Add your safety stock.
Worked example
40 units a day, 7-day lead time, 100 units safety stock
- Lead-time demand = 40 × 7 = 280
- Reorder point = 280 + 100
Reorder when stock reaches 380 units.
Common questions
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APA
Free Calculator. (n.d.). How to calculate a reorder point. https://freecalculator.tech/guides/how-to-calculate-reorder-point
MLA
"How to calculate a reorder point." Free Calculator, https://freecalculator.tech/guides/how-to-calculate-reorder-point.
Link
How to calculate a reorder point — Free Calculator, https://freecalculator.tech/guides/how-to-calculate-reorder-point