Calculating your reorder point is straightforward once you know the Reorder Point formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Reorder Point Calculator.
What is Reorder Point?
The Reorder Point calculation tells you your reorder point from a few simple inputs. The figure you are solving for here is the reorder point.
The Reorder Point formula
The core formula is:
Reorder point = Average daily demand × Lead time + Safety stockHere is what each input means:
- Average daily demand — a number. Example: 50.
- Lead time — a value measured in days. Example: 7 days.
- Safety stock — a number. Example: 100.
How to calculate it step by step
- Write down the average daily demand (for example, 50).
- Write down the lead time (for example, 7 days).
- Write down the safety stock (for example, 100).
- Apply the formula above to get your reorder point.
- Double-check the result with the Reorder Point Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Average daily demand | 50 |
| Lead time | 7 days |
| Safety stock | 100 |
| Reorder point | 450 |
With average daily demand of 50, lead time of 7 days and safety stock of 100, the reorder point works out to 450.
Example 2
With average daily demand of 100, lead time of 7 days and safety stock of 100, the reorder point works out to 800.
| Result | Value |
|---|---|
| Reorder point | 800 |
Example 3
With average daily demand of 25, lead time of 7 days and safety stock of 100, the reorder point works out to 275.
| Result | Value |
|---|---|
| Reorder point | 275 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
Prefer not to do the maths by hand? — the Reorder Point Calculator does it instantly, for free, with the formula and a worked example built in.
Related calculators
Continue exploring business calculators with these tools: Discount Calculator, Price Elasticity of Demand Calculator, Profit Margin Calculator, Gross Profit Calculator, ROI Calculator.