Reorder Point Calculator
When to reorder, and how much safety stock the service level you want actually requires.
The reorder point is what you expect to sell during the lead time, plus a buffer for the times demand or the supplier surprises you.
How the reorder point calculator works
The reorder point is what you expect to sell during the lead time, plus a buffer for the times demand or the supplier surprises you.
Safety stock is where the judgement sits. It scales with the service level you choose, and the relationship is punishing at the top: going from 95% to 99% availability costs roughly 40% more safety stock, and 99.9% costs more than double the 95% figure. Perfect availability is unaffordable by design.
The formula here accounts for variability in both demand and lead time, because supplier reliability is usually the larger contributor and is routinely ignored.
Formula: ROP = demand × lead time + z × √(LT×σd² + d²×σLT²)
Worked examples
| Inputs | Reorder point | Note |
|---|---|---|
| 40 a day, 14-day lead time | 771 units | reorder at about 799 |
| A reliable supplier | 634 units | much less safety stock |
| At 99.9% service | 956 units | nearly double the buffer |
FAQFrequently asked questions
What is a reorder point?
The stock level at which you place a new order — expected demand over the lead time plus safety stock.
What is safety stock for?
The times demand runs hot or the supplier runs late. Without it, average lead time means stocking out half the time.
Why is 99.9% service so expensive?
Because safety stock scales with the normal distribution's tail. Going from 95% to 99.9% nearly doubles the buffer for a 4.9-point gain.
Does supplier reliability matter more than demand variability?
Frequently yes, and it is routinely ignored. This page shows which contributes more to your buffer.
What service level should I target?
Depends on the cost of a stockout against the cost of holding. For most retail, 95% is a reasonable default.
Where these figures come from
- APICS / ASCM — inventory management terminology — the turnover, safety stock and reorder point definitions used here
- Australian Competition and Consumer Commission — the Australian consumer law regulator
Last checked: September 2026. These are standard retail and inventory-management definitions.