INVENTORY POSITION · PRACTICAL GUIDE

Reorder Point Calculator Guide

Learn a basic reorder-point calculation, its assumptions and when a simple buffer is not enough.

What this tool helps you examine

A reorder point is a trigger for replenishment in a continuous-review setting. This starter method combines expected demand during lead time with a chosen safety-stock buffer.

Starter formula: Reorder point = average demand per day × replenishment lead time in days + safety stock

Worked example

At 12 units per day, a 5-day lead time and an 18-unit buffer, the trigger is 12 × 5 + 18 = 78 units. Confirm inventory position using usable stock plus relevant receipts less allocations.

Limits to keep in view

These calculations are deliberately small and transparent. They do not include every product rule, location, calendar, lead-time distribution, lot-sizing policy, resource, service target or commercial constraint. Use the result as a learning prompt, then validate it with the relevant data and planning process.