Inventory Reorder Point Calculator
Calculate reorder points, safety stock levels, and economic order quantity (EOQ) to prevent stockouts and optimize inventory costs.
Days from placing order to receiving inventory
Daily demand variability for safety stock calculation
1.28 = 90%, 1.65 = 95%, 2.33 = 99%
EOQ Parameters (Optional)
Enter inventory parameters and click calculate.
What This Calculator Does
This calculator determines the optimal inventory reorder point and safety stock level to prevent stockouts while minimizing carrying costs. It also computes the Economic Order Quantity (EOQ) to optimize order sizes.
The Formula
The reorder point has two components: lead time demand (average units sold during the resupply period) and safety stock (buffer against demand uncertainty). The Z-score corresponds to your target service level: 1.65 for 95%, 2.33 for 99%. EOQ minimizes the combined cost of ordering and holding inventory.
Step-by-Step Example
Enter demand data
Average daily demand: 50 units. Standard deviation of daily demand: 10 units.
Set lead time and service level
Lead time: 7 days. Service level: 95% (Z = 1.65).
Calculate reorder point
Lead time demand: 50 x 7 = 350 units. Safety stock: 1.65 x 10 x 2.65 = 44 units. Reorder point: 350 + 44 = 394 units.
Calculate EOQ
With $50 order cost and $5 annual holding cost: EOQ = sqrt(2 x 18,250 x 50 / 5) = 604 units per order.
Real-World Use Cases
Ecommerce Inventory Management
Set automated reorder alerts in your inventory system based on calculated reorder points for each SKU.
Supplier Negotiation
Use EOQ to negotiate optimal order quantities and frequency with suppliers for better pricing.
Seasonal Demand Planning
Adjust demand parameters for seasonal products to prevent stockouts during peak periods.
Common Mistakes to Avoid
Using average demand without accounting for variability. Demand fluctuations require safety stock to prevent stockouts.
Not updating lead time estimates. Supplier delays, shipping disruptions, and customs processing can extend lead times significantly.
Setting a 99% service level for all products. High service levels require much more safety stock. Reserve 99% for your most critical items.
Ignoring EOQ when placing orders. Ordering too frequently increases ordering costs; ordering too much increases holding costs.
Frequently Asked Questions
Accuracy and Disclaimer
Reorder point and EOQ calculations assume relatively stable demand patterns and consistent lead times. For highly seasonal or volatile products, consider more advanced forecasting methods.
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