Reorder point calculator

The formula

A reorder point is two things added together.

reorder point = (units sold a day × lead time in days) + safety stock

The first part covers what you will sell while you wait. The second covers the weeks when the shop is busy and the van is late at the same time. Both halves matter. Most stores get the first one right and skip the second.

A worked example

You sell twelve units a day. Your supplier takes fourteen days from order to shelf. You keep sixty units as a buffer.

Twelve times fourteen is 168 units sold while you wait. Add the sixty unit buffer and your reorder point is 228.

So when stock drops to 228, the order goes out. If everything runs normally you will still have sixty units left when the new pallet arrives.

What a good number looks like

The buffer is the part worth arguing about. A rough rule is that it should cover at least a fifth of your lead time demand again. Below that, one late delivery empties the shelf.

If you want the buffer worked out properly rather than guessed, use the safety stock calculator. It asks for your worst week and your slowest delivery, then gives you the gap between those and normal.

Three things push a reorder point up: longer lead times, faster sales, and a supplier who misses dates. Only the last one is worth a conversation.

Where this goes wrong

The number is only as good as your stock count. If Shopify thinks you have 228 and the shelf has 190, the order goes out late whatever the maths says. That is the same problem the article on stock counts drifting is about, and it is worth fixing first.

The other common mistake is using a peak month for daily sales. Do that and you carry the cost of Christmas stock all year. Use a normal month, then set a separate reorder point for the run up to a peak.