Use this Reorder Point Calculator to estimate the inventory level at which you should place a new order to avoid stockouts.
This tool helps ecommerce brands, operators, and inventory managers balance daily demand, supplier lead time, and safety stock more effectively.
Reorder Point Calculator
Calculate the inventory level at which you should place a new order to avoid stockouts based on daily sales, lead time, and safety stock.
You should place a new order when inventory reaches this level to reduce the risk of stockouts.
What Is a Reorder Point Calculator?
A reorder point calculator helps you determine the inventory level at which you should place a new replenishment order.
It combines average daily sales, supplier lead time, and safety stock to estimate when your next purchase order should be triggered.
This is a key inventory planning metric because it helps reduce the risk of stockouts while avoiding unnecessary overstocking.
Reorder Point Formula
The basic formula is:
Reorder Point = Average Daily Sales × Lead Time + Safety StockThis tells you the stock level where you should reorder to cover expected demand while waiting for new inventory to arrive.
Reorder Point Calculator Example
Here is a simple example:
| Metric | Value |
|---|---|
| Average Daily Sales | 10 units |
| Lead Time | 14 days |
| Safety Stock | 20 units |
Demand During Lead Time: 140 units
Reorder Point: 160 units
This means you should place a new order when inventory falls to 160 units.
Why Reorder Point Matters
Reorder point matters because it helps you maintain inventory availability without waiting too long to reorder.
If you reorder too late, you risk stockouts and lost sales. If you reorder too early, you may tie up unnecessary cash in inventory.
A clear reorder point helps create a more stable and predictable replenishment process.
How to Improve Inventory Reordering
If you want to improve inventory planning, here are some of the most common ways:
- Track average daily sales regularly instead of relying on old assumptions.
- Use realistic supplier lead times, including delays and variability.
- Adjust safety stock based on demand volatility and service level goals.
- Review fast-moving and slow-moving products separately.
- Recalculate reorder points when seasonality or demand patterns change.
FAQ
How do you calculate reorder point?
Reorder point is calculated by multiplying average daily sales by lead time and then adding safety stock.
What is safety stock?
Safety stock is extra inventory kept on hand to protect against demand spikes, shipping delays, or supplier issues.
Why is reorder point important in ecommerce?
Because it helps prevent stockouts, protects sales continuity, and supports more reliable inventory replenishment.
What happens if my reorder point is too low?
If it is too low, you may place orders too late and run out of stock before new inventory arrives.
Can I use this calculator for Shopify or WooCommerce inventory planning?
Yes. This calculator works for ecommerce stores, Shopify brands, WooCommerce stores, Amazon sellers, and broader inventory operations.