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Reorder Point Calculator

Find the stock level at which to reorder, from daily usage, supplier lead time and a safety stock you enter or work out from a service level.

Level: Grade 12 to college

Printable worksheet

Reorder Point Calculator

Know the answer you need? Pick an input to work backward.

Inputs
Safety stock

Result

Reorder point

314.81 units

Reorder at 314.81 units: 280.00 expected during the lead time plus 34.81 safety stock.

Lead-time demand
280 units
Safety stock
34.81 units
Z-score
1.6449
Days of usage at the reorder point
7.87 days

See the step-by-step solution ↓

Step-by-step solution

  1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days

    40×7=280

  2. Look up Z, how many standard deviations of cushion a 95% service level needs (from the bell curve)

    Z = Φ⁻¹95100 = 1.644854

  3. Find the safety stock: Z × how much daily demand varies (σ) × the square root of the lead time, because swings partly cancel out over several days

    1.644854×8×7=34.814989

  4. Add the cushion to what you'll use while waiting. That's the stock level to reorder at

    280+34.814989=314.814989

Test yourself

20 quick questions built from this calculator's formula: work out results, predict what happens when an input changes, and work backward from an answer. Every answer comes with the working.

Please note: Results are estimates for planning and comparison. Lenders, banks, and tax authorities may round differently or include fees not modeled here, so confirm figures with your provider before deciding.

What this calculator does

Find out how low your stock can get before you should order more. That level is the reorder point. When stock drops to it, you place a new order. Set it right, and the new stock arrives just as the shelf would have run empty. It has two parts. The first is the stock you expect to use while you wait for the delivery. The second is a cushion, called safety stock, for days when demand runs higher than usual.

The calculator multiplies your average daily usage by the supplier's lead time, the days a delivery takes. Then it adds safety stock. You can type in a safety stock you already use. Or the calculator can work one out from how much your daily demand varies and the service level you want. Service level is the chance of not running out while an order is on its way.

Where it's used

Why this math matters outside the classroom:

  • Restocking a shop. A store selling 20 units a day with a 5-day supplier lead time and 30 units of safety stock reorders at 130 units.
  • Safety stock. Higher service-level targets raise the z-value and so the safety stock needed to cover swings in daily demand.
  • Longer lead times. Doubling a supplier's lead time doubles the expected demand during the wait, so the reorder point rises.
  • Operations courses. Students combine average demand, its standard deviation and lead time to set a reorder point.

How to use it

  1. Enter the average number of units used or sold per day. Then enter the lead time, the days from placing an order to having the stock ready to use.
  2. Choose whether to work out safety stock from a service level or enter your own figure.
  3. To work it out, enter the service level and the standard deviation of daily demand from your sales history. Standard deviation is a measure of how much demand swings from day to day.
  4. Reorder when stock on hand, plus anything already on order, falls to the reorder point.

What the inputs mean

Average daily usage
The average units used per day over a typical period. Count days the same way as the lead time, either calendar days or working days.
Lead time
Days from deciding to reorder until you can use the goods. Include ordering, shipping and receiving time.
Service level
The chance of not running out during one lead time. 95% means running out in roughly 1 in 20 restocking cycles. Each step higher needs a bigger jump in safety stock than the last.
Standard deviation of daily demand
How much daily demand usually varies around its average. Work it out from at least a few weeks of daily usage.

Formula and method

reorder point = average daily usage × lead time + safety stock
safety stock = Z × σ(daily demand) × √(lead time)
Z = inverse standard normal of the service level (95% → 1.645)

The first part is the demand you expect during the lead time. Say you ordered exactly when stock hit that level. You'd run out about half the time, whenever demand ran above average.

Safety stock covers those ups and downs. In the formula, σ (sigma) is the standard deviation of daily demand, and L is the lead time in days. If each day's demand is independent and follows a bell curve (a normal distribution), demand over L days varies by σ × √L. So the swings grow with the square root of the lead time, not in step with it. Multiply by Z, the number of standard deviations that matches your service level, and you get the buffer.

Z comes from the standard bell curve, worked backward from your service level. 90% gives about 1.28, 95% about 1.645 and 99% about 2.33. Going from 95% to 99% raises the safety stock by more than 40%.

Worked example

A store sells an average of 40 units a day with a standard deviation of 8 units, the supplier takes 7 days, and the owner wants a 95% service level.

  1. Lead-time demand: 40 × 7 = 280 units.
  2. Z for 95%: 1.644854.
  3. Safety stock: 1.644854 × 8 × √7 = 1.644854 × 8 × 2.645751 = 34.81 units.
  4. Reorder point: 280 + 34.81 = 314.81 units.

Result: Reorder when stock falls to 314.81 units, about 315 in practice. If the owner keeps a fixed 50-unit buffer instead, the reorder point is 330 units.

Understanding the result

The reorder point tells you when to order, not how much. How much is a separate decision. It's often based on economic order quantity (the order size that keeps costs lowest) or supplier minimums.

'Days of usage at the reorder point' shows how many days of average demand the reorder level covers. Anything beyond the lead time is your cushion.

Compare stock on hand plus stock already on order with the reorder point. That way, you don't order twice for the same shortfall.

Assumptions and limitations

  • Each day's demand doesn't depend on the day before, and it roughly follows a bell curve (normal distribution).
  • Lead time is fixed and known.
  • Service level means the cycle service level: the chance of not running out in one restocking cycle.
  • If lead times vary, you need more safety stock than this formula gives.
  • Seasonal, trending or very lumpy demand doesn't follow a bell curve, so the formula fits poorly.
  • It doesn't cover fill rate targets (the share of orders filled from stock), order quantities or holding costs.

Frequently asked questions

What service level should I use?

It's a business trade-off between the cost of holding extra stock and the cost of running out. Many businesses use around 90–95% for ordinary items and 97–99% for critical or high-margin ones. Every step up costs more stock than the last.

Why does safety stock use the square root of lead time?

When each day's swings are independent, high and low days partly cancel out. The variance (spread) of total demand grows in step with the number of days. Its standard deviation, the square root of the variance, grows with the square root of the days. So doubling the lead time raises safety stock by about 41%, not 100%.

How do I find the standard deviation of daily demand?

List daily usage for a few weeks or months and work out its standard deviation, for example with the standard deviation calculator. Count days the same way as your lead time, either working or calendar days.

Should I round the reorder point?

Round up to a whole unit, or to your pack size. Rounding down slightly lowers your real service level.

How this calculator is checked

Method: Standard inventory model: ROP = d × L + SS, with SS = Z × σ_d × √L for normally distributed, independent daily demand and fixed lead time. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.

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