Reorder level calculator — the number that stops the line stopping.
Enter daily usage and lead time. Get the safety stock you should be holding and the level at which the next order has to go out.
Result
- Demand during lead time
- 800
- Safety stock
- 880
- Reorder level
- 1,680
Place the order when stock falls to 1,680 units, and hold 880 as the buffer for a busy week meeting a slow delivery.
The reorder level answers one question: at what stock position must a fresh order be placed so that material arrives before the existing stock runs out. It is not a target, not a minimum, and not the quantity to buy — those are different numbers, and confusing them is why some stores hold six months of a cheap fastener and still run out of the expensive casting.
Two things decide it. Consumption, which is how fast the item is used, and lead time, which is how long the supplier takes. Multiply them and you have the demand during lead time — the stock consumed while waiting. Order at exactly that level and, if nothing goes wrong, the new material arrives as the last of the old is issued.
Something usually goes wrong. A week of higher demand, a supplier who takes eleven days instead of eight. Safety stock is the buffer for that variation, and it is what separates a reorder level that works in practice from one that works on paper.
The formula
- Demand during lead time
Average daily usage × Average lead time- Safety stock
(Max daily usage × Max lead time) − (Avg daily usage × Avg lead time)- Reorder level
Demand during lead time + Safety stock
A worked example
A workshop consumes an average of 80 units a day, and on its busiest days 120. The supplier normally delivers in 10 days, but has taken as long as 14.
Demand during lead time is 80 × 10 = 800 units. The worst case is 120 × 14 = 1,680 units, so safety stock is 1,680 − 800 = 880 units. The reorder level is 800 + 880 = 1,680 — which is to say, place the order when stock falls to 1,680 units, and hold 880 as the buffer that covers a bad month meeting a slow delivery.
The number looks high until you price the alternative. Eight hundred and eighty units of a component is working capital sitting on a rack; a stopped line is every operator, every machine and every downstream commitment for the days it takes to get material in.
Reorder level and reorder quantity are different questions
The reorder level says when to buy. The reorder quantity says how much, and it is answered by an entirely different trade-off: the cost of placing an order against the cost of carrying stock, plus whatever minimum the supplier insists on and whatever shelf life the material has.
Setting one and calling it the other is the most common mistake in stores planning. A reorder level used as an order quantity produces enormous purchases of fast-moving items; a quantity used as a level produces stockouts on anything with a long lead time.
Why the number has to be per item and per location
A single company-wide rule — 'order when a month is left' — fails in both directions at once. It over-stocks the item with a three-day lead time and under-stocks the import with a six-week one, and it ignores that the same item may move quickly at one plant and slowly at another.
Calculating it per item, per location is arithmetic rather than insight, which is exactly the kind of work worth handing to a system. A stores module that holds a minimum level against each item at each location can raise the shortage the moment it is crossed, instead of waiting for somebody to notice on a stock report.
Questions people ask.
What is reorder level?
The stock position at which a fresh purchase order must be raised so that material arrives before existing stock runs out. It is the demand expected during the supplier's lead time, plus a safety stock buffer for variation in either.
How is reorder level calculated?
Reorder level = (average daily usage × average lead time) + safety stock, where safety stock = (maximum daily usage × maximum lead time) − (average daily usage × average lead time).
What is safety stock and why do I need it?
It is the buffer that covers the gap between normal and worst case — a week of unusually high demand, or a delivery that takes longer than promised. Without it, a reorder level works only when nothing varies, which is not how supply or demand behave.
What is the difference between reorder level and reorder quantity?
Reorder level is when to order; reorder quantity is how much to order. The first depends on usage and lead time. The second depends on ordering cost, carrying cost, supplier minimums and shelf life. They are separate decisions and mixing them up causes both overstocking and stockouts.
Should reorder level be the same for every item?
No. It depends on that item's consumption rate and that supplier's lead time, both of which vary widely across a store. It should also be set per location where the same item moves at different speeds at different plants.
Other free tools
Doing this for every item, every day?
A calculator is the right tool once. When it is every item in the store, it belongs in the system that already knows the numbers.