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When should you reorder stock?

Quick lesson1 min read

The reorder point combines demand during the delivery time with a safety margin. The decision should consider both what is left and what you have already ordered but not yet received.

An example with numbers

You sell 12 units a day and the supplier takes five days. You need 60 units to cover the wait. If you choose 20 units of safety stock, the reorder point is 80 units of inventory position under steady demand.

Try it with your numbers

Repeat the calculation with a seven-day lead time. Decide whether your figures use calendar days or business days and use the same convention throughout.

Open the calculator

Example figures for learning purposes. They are not a recommendation and do not replace professional advice.

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