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Reorder Point Calculator

Find the stock level that should trigger your next order.

The reorder point is the single number that decides whether replenishment happens on time or in a panic. It answers one question: at what on-hand quantity must an order leave, so that new stock arrives before the shelf empties? Everything else in replenishment — order quantity, supplier choice, expediting — is downstream of getting this trigger right.

Your numbers

units/day
days
units

Use the Safety Stock calculator if you don’t have this yet.

Reorder point

Place a replenishment order when stock reaches this many units.

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The formula

ROP = (Daily demand × Lead time) + Safety stock

Order when on-hand stock hits this level so new stock lands before you run out.

What it means

Reorder Point — full definition

Read in the glossary

How to use it

  1. 1

    Take average daily demand from the last 60–90 days of issues, not from a forecast or a budget.

  2. 2

    Use the lead time your supplier actually delivers in, measured from PO approval to goods received.

  3. 3

    Add safety stock sized for how much both of those numbers swing — that buffer is what absorbs a bad week.

Where it goes wrong

  • Using nominal lead time from the contract instead of measured lead time is the most common cause of stockouts on items that "should" have been covered.

  • A reorder point set once and never revisited drifts out of date as soon as demand or supplier performance shifts. Recalculate quarterly, and immediately after any supplier change.

Worked example

A distributor moving 40 units a day

Demand runs at 40 units/day, the supplier delivers in 7 days, and 80 units of safety stock cover the variability. The reorder point is (40 × 7) + 80 = 360 units. When on-hand stock touches 360, the purchase order goes out — the 280 units consumed during lead time land the delivery right as the buffer is reached, not after it is gone.

Common questions

Should the reorder point include stock already on order?

Compare it against your inventory position — on-hand plus on-order minus allocations — not against on-hand alone. Otherwise you will re-order every day until the first delivery arrives.

What if demand is seasonal?

Use the daily demand you expect during the coming lead time, not a flat annual average. For a seasonal item, run the calculation separately for peak and off-peak and switch the trigger ahead of the season.

Do I need a different reorder point per location?

Yes, if locations replenish independently. Demand and lead time both differ by site, so a single group-wide trigger will overstock some branches and starve others.

Let AWRA do this on your live data

This calculator works on one set of numbers. AWRA OpsHub keeps reorder point calculator results current across every item, supplier and location — automatically.