Free tool
Reorder point calculator with safety stock
Enter your average daily usage and supplier lead time, choose a safety stock method, and get the stock level at which you should place the next order.
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What the reorder point tells you
The reorder point is the stock level at which you place a new order, so the delivery arrives before you run out. Set it too low and you sell out while the truck is still on the N3. Set it too high and cash sits on the shelf. This reorder point calculator and safety stock calculator works out both numbers from four or five inputs.
The core formula is simple:
- Lead time demand = average daily usage × average lead time in days.
- Reorder point = lead time demand + safety stock.
Lead time demand covers what you expect to use while waiting for the order. Safety stock covers the days when usage is higher or the supplier is later than usual. For short definitions, see reorder point and safety stock in our glossary.
Two ways to calculate safety stock
Method 1: Days of cover
Safety stock = average daily usage × buffer days. You decide how many extra days of stock you want to hold.
Method 2: Max and average
Safety stock = (maximum daily usage × maximum lead time) − (average daily usage × average lead time). This covers the case where your busiest day and your slowest delivery happen together. The calculator lists it as the service-level method, because it aims to protect availability even in a bad week rather than in a typical one.
Worked example
A Gauteng hardware distributor sells a 25 kg bag of tile adhesive. Over the last three months it has averaged 40 bags a day, with a busiest day of 60 bags. The supplier usually delivers in 7 days, but the slowest delivery took 10 days.
| Step | Days of cover (5 days) | Max and average |
|---|---|---|
| Lead time demand | 40 × 7 = 280 bags | 40 × 7 = 280 bags |
| Safety stock | 40 × 5 = 200 bags | (60 × 10) − (40 × 7) = 600 − 280 = 320 bags |
| Reorder point | 280 + 200 = 480 bags | 280 + 320 = 600 bags |
With days of cover, the buyer reorders when stock falls to 480 bags. With the max-and-average method, the trigger is 600 bags. The second method holds 120 more bags as a buffer, which is the price of protection against a week where peak demand and the slowest delivery coincide. Notice that with this method the reorder point always equals maximum daily usage × maximum lead time (60 × 10 = 600).
How to choose your inputs
- Average daily usage. Take units issued or sold over a recent period, for example 90 days, and divide by the number of days you trade. If you are closed on Sundays, divide by trading days, not calendar days, and use the same basis for lead time.
- Lead time. Measure from the day you place the order to the day stock is received and available to pick, not the day the supplier says it shipped. Include time to book in and put away.
- Maximum daily usage. Use a genuinely busy but normal day. Leave out one-off events such as a single bulk order you will not see again.
- Maximum lead time. Use the slowest recent delivery that could happen again, such as a port delay on imports or a transport hold-up.
- Buffer days. Start small for reliable local suppliers and larger for imports, critical items or products with erratic demand.
Common mistakes
- Mixing units of measure. Usage in singles and stock in boxes of 12 gives a reorder point that is wrong by a factor of 12.
- Using annual averages for seasonal stock. Calculate peak-season reorder points separately.
- Quoting the supplier's lead time. Use your own receiving records instead.
- Ignoring stock on order. Compare the reorder point with on-hand plus open purchase orders.
- Setting and forgetting. Usage and lead times drift; review them.
- Same buffer for everything. A slow, cheap C item does not need the protection of a fast-moving A item. Our ABC analysis calculator helps you split them.
How to apply the results
A reorder point only helps if someone acts on it. Record it against each product, check stock against it on a fixed rhythm and make one person responsible for raising the purchase order. Pair it with a sensible reorder quantity that respects supplier minimums and pack sizes. Our guide on how to reduce stockouts covers the wider process, and the reorder point is only as good as your stock count, so keep counts accurate with regular cycle counts.
How VasKem uses reorder points
In VasKem WMS, each product record holds a reorder point and a reorder quantity alongside its SKU, cost price, barcode and unit of measure. When stock drops to the reorder point, the product is flagged in the low-stock alerts, so buyers see what needs ordering without scanning a spreadsheet. From there you can raise a purchase order to the supplier for the right warehouse, and the goods receipt updates stock levels when it is submitted.
VasKem does not work out the reorder point for you. You calculate it with this tool or your own spreadsheet, enter it on the product record and review it as usage changes. See how it fits together on the features page or in the product tour, which uses fictional sample data.
Frequently asked questions
What is a good safety stock level?
There is no single right number. It depends on how much your daily usage swings, how reliable the supplier is and how costly a stockout would be for that product. Start with a few days of cover for steady local items and more for imports or critical lines, then adjust based on how often you actually run short or carry excess.
Should I use days of cover or the max-and-average method?
Use days of cover when you have little history or want a simple rule your buyers can apply across many SKUs. Use the max-and-average method when you have reliable records of your busiest days and slowest deliveries, because it ties the buffer to what has really happened. For high-value items, the max-and-average method usually holds more stock, so check that the extra cash is justified.
Is the reorder point the same as the reorder quantity?
No. The reorder point is the stock level that triggers an order. The reorder quantity is how much you order once that point is reached, which depends on supplier minimums, pack sizes, price breaks and storage space. VasKem stores both on each product record.
How often should I recalculate reorder points?
Review fast movers and A items monthly and the rest at least quarterly. Recalculate straight away when a supplier changes lead time, a product goes on promotion or demand shifts with the season. A reorder point based on last year's usage is one of the most common causes of both stockouts and overstock.
Does the reorder point include stock already on order?
The formula compares the reorder point with your available stock position. In practice, add stock already on an open purchase order to what is on the shelf before deciding to reorder, otherwise you may place a second order for the same shortfall.
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