Inventory
Reorder Point Planner
Calculate the true reorder point, lead-time demand plus safety stock, not lead-time demand alone, which triggers orders too late.
Reorder check
Order nowReorder point 700
Lead-time demand500 units
Gap to reorder-50 units
How this works
A reorder point that only accounts for demand during lead time and ignores safety stock triggers the reorder too late, leaving no buffer for demand variability during the replenishment window.
Key terms
- Lead-time demand: average daily demand times lead time in days, the consumption expected before a new order arrives.
- Reorder point: lead-time demand plus safety stock, the on-hand level that should trigger a new order.
Assumptions
- Steady average daily demand, one lead time
Limitations
- Single SKU or SKU family, not a multi-supplier or blended-lead-time model
Sources
Standard inventory-control (reorder point) practice.
Worked example
A reorder point computed from lead-time demand alone (500 units) reads on-hand (650) as comfortably above it. Adding the 200-unit safety stock the policy calls for raises the true reorder point to 700, meaning on-hand is already 50 units past it, the order should have gone out already.
Common use cases
- Setting the reorder trigger for a purchasing system or manual review
- Checking whether current on-hand inventory has already crossed the reorder point
- Following up a safety-stock policy decision with an actionable trigger level
Frequently asked
- Why isn't lead-time demand alone the reorder point?
- Lead-time demand only covers average consumption while a new order is in transit. Without safety stock added on top, normal demand variability during that window causes a stockout before the replenishment arrives.
- What happens if on-hand inventory is already below the reorder point?
- It means the reorder should have already been triggered. The gap between on-hand and the reorder point is effectively how late the order already is, not a cushion still remaining.
- Does this work for multiple suppliers or blended lead times?
- No, this models a single SKU or SKU family against one lead time. A part with multiple qualified suppliers at different lead times needs a blended or supplier-specific calculation instead.
- How is safety stock determined here?
- Safety stock is an input you provide from your own service-level policy, not derived internally; this tool combines it with lead-time demand rather than setting the policy for you.