Find the inventory level that triggers a new purchase order from daily usage, lead time, and safety stock.
Daily Usage (units/day) — Business metric in units/day. Affects cost, margin, or break-even; validate against recent data. Example: 50 units/day.
Lead Time (days) — Time spent in days. Track actual minutes to improve the hourly rate estimate. Example: 7 days.
Safety Stock (units) — Business metric in units. Affects cost, margin, or break-even; validate against recent data. Example: 100 units.
Reorder Point
450 units
Reorder Point — Calculated outcome units. Derived from your inputs via the displayed formula; use to plan.
Demand During Lead Time
350 units
Demand During Lead Time — Calculated outcome units. Derived from your inputs via the displayed formula; use to plan.
What this means
Multiply your average daily usage by the supplier lead time in days to find how much stock is consumed before a new shipment arrives (demand during lead time). Add the safety stock cushion, and the sum is the trigger level: when on-hand stock drops to this count, place the next order.
The reorder point is the inventory level at which you should place a new purchase order. It covers the units consumed during the supplier lead time plus a safety buffer you want to keep on hand.
Formula
ROP = (daily usage × lead time) + safety stock
Worked examples
FAQ
What happens if my safety stock is zero?
The reorder point equals demand during lead time. Any added delay or usage spike causes a stockout, so a buffer is usually recommended.
Is the reorder point the same as minimum stock?
Not exactly — the reorder point triggers the order, while minimum stock is often the floor you keep after the shipment arrives. Safety stock is the floor in this formula.