Reorder point calculator
Calculate reorder point and statistical safety stock from demand and lead-time variability at your chosen service level, including marketplace receiving time.
33 days of cover at current stock
| Step | Working | Result |
|---|---|---|
| Effective lead timeStock sitting in a marketplace receiving queue is not sellable stock. | 30 supplier + 5 receiving | 35 days |
| Lead-time demand | 12 × 35 | 420 units |
| Safety stock at 95% service levelCovers both demand spikes and late deliveries. The z-score converts your target in-stock probability into standard deviations. | 1.645 × √(35 × 4² + 12² × 5²) | 106 units |
| Reorder pointPlace the next purchase order when sellable stock reaches this number. | 420 + 106 | 526 units |
Safety stock is not a number of weeks
The reorder point itself is simple: average daily sales multiplied by lead time in days, plus safety stock. The part that separates a reorder point that works from one that leaves you out of stock is the safety stock, and the usual approach — "hold two weeks of cover" — ignores the one thing safety stock exists to absorb, which is variability.
Two products selling ten units a day can have completely different stockout risk. One sells eight to twelve units consistently and has a supplier who ships in 30 days every time. The other sells two units on a quiet day and forty on a good one, from a supplier whose lead time ranges from 25 to 60 days. A fixed two weeks of cover is far too much for the first and nowhere near enough for the second, and the cost of getting it wrong is storage fees in one direction and lost sales and lost rank in the other.
Sizing it statistically
Safety stock should be sized on the combined standard deviation of demand and lead time, scaled by the service level you actually want. At a 95% service level that is 1.645 standard deviations; at 99% it is 2.326. Pull ninety days of order history, compute the standard deviation of daily sales, get the spread of your supplier's actual delivery dates rather than their promise, and the number stops being a guess.
One addition that catches marketplace sellers out: fulfilment-centre receiving time is part of your lead time. Stock sitting in a check-in queue is not sellable stock, and three to ten days of it sits between the delivery date and the date the units become available. A reorder point built on supplier lead time alone is short by exactly that amount, and the failure shows up as being out of stock while your inventory is physically in the warehouse.
Questions people ask about this
Answers written from the published rules, not from other people's summaries of them. Every figure quoted below is listed with its source at the foot of this page.
Every formula on this siteWhat is the reorder point formula?
Average daily sales multiplied by lead time in days, plus safety stock. Safety stock needs its own assumptions: sizing it as "two weeks of cover" ignores variability, which is precisely the thing safety stock exists to absorb.
How much safety stock do I need?
It depends on how variable your demand and your lead times are, and how often you are willing to stock out. At a 95% service level, safety stock is 1.645 standard deviations of combined demand-and-lead-time variability. Pull 90 days of order history, compute the standard deviation, and the answer stops being a guess.
Should I include FBA receiving time in lead time?
Yes. Stock sitting in a receiving queue is not sellable stock. Adding three to ten days of check-in time to your supplier lead time is the difference between a reorder point that works and one that leaves you out of stock while your inventory sits in the warehouse.
How do I get the lead time variability if my supplier always quotes the same number?
Ignore the quote and use your own purchase order history. Record the date you placed each order and the date the goods became sellable, and take the spread of those actuals. Suppliers quote a target, not a distribution, and the difference between a quoted 30 days and an observed 30-to-55 days is the entire reason safety stock exists. Six or eight past orders is enough to see the shape, and it is a far better input than any number a supplier will give you.
What service level should I aim for?
Higher where a stockout is expensive beyond the lost sale. On a marketplace where running out costs you search rank and the recovery takes weeks, 97 to 99% is usually justified. On a slow-moving, low-margin item where the customer will wait, 90% may be right. The cost of moving from 95% to 99% is not linear — it is the difference between 1.645 and 2.326 standard deviations, so roughly 40% more safety stock for four points of coverage.
Should the reorder point change through the year?
Yes, if your demand is seasonal, and this is where fixed reorder points fail most visibly. Average daily sales computed over the trailing ninety days lags a Q4 ramp badly: by the time the average has risen, the peak is underway and the replenishment that should have been placed in September is now arriving in January. For seasonal products, drive the reorder point from a forward forecast rather than a trailing average, and place the peak order against the calendar.
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Where these numbers come from
This calculator uses arithmetic rather than published rates — every figure comes from the values you enter. See the methodology page for the formulas behind it.
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More on the working: every formula on this site, the full source register, what the terms mean, and how we decide what to publish. What an estimate here can and cannot support is set out in the accuracy notes.