MihsabaHow to use
Calculate a reorder point from daily demand, supplier lead time and your selected safety stock, with lead-time demand shown separately.
- Enter Average daily demand in units.
- Enter Lead time in days.
- Enter Safety stock in units.
- Calculate, then review the results and method assumptions.
How it is calculated
Example
Daily demand of 20 over seven lead-time days gives demand of 140 units. Adding safety stock of 30 sets the reorder point at 170 units.
Important notes
The point determines when to order, not order size. In continuous review compare it with inventory position: on hand plus on order minus backorders. Safety stock is entered, not inferred from a statistical service level.
Worked examples and interpreting results
Daily demand of 20 over seven lead-time days gives demand of 140 units. Adding safety stock of 30 sets the reorder point at 170 units.
| Case | Calculation | Result |
|---|---|---|
| Lead-time demand | 20 × 7 | 140 |
| Reorder level | 140 + 30 | 170 |
How to check the result
The point determines when to order, not order size. In continuous review compare it with inventory position: on hand plus on order minus backorders. Safety stock is entered, not inferred from a statistical service level.
Frequently asked questions
Is this the order quantity?
No. It is the trigger level. EOQ can estimate an order size, then supplier constraints may change it.
Which time unit should I use?
Use daily demand and matching lead-time days. If demand uses working days, convert lead time to that same day basis.
Does this convert currencies or import campaign data?
It uses only entered numbers, without import or currency conversion. Align currency, period and metric definitions in your source before entering values.