The reorder point is the inventory level at which a new purchase order must be placed to avoid running out of stock before the new shipment arrives. Placing orders too late causes stockouts and lost sales. Placing too early ties up capital in excess inventory. The formula: Reorder Point = (Average Daily Sales × Lead Time in Days) + Safety Stock. Safety stock provides a buffer for demand spikes and supplier delivery delays. The Utility Spark Reorder Point Calculator computes both components: the base demand-lead time product and the optimal safety stock level based on demand variability and desired service level.
lightbulb When to use this tool
- check_circle Setting reorder triggers in your inventory management system for each SKU.
- check_circle Determining how much safety stock to hold for fast-moving vs slow-moving products.
- check_circle Calculating the impact of a supplier's longer lead time on your required minimum stock level.
- check_circle Building a just-in-time inventory system by minimising reorder point while maintaining service level.
Why use our tool?
Safety Stock Calculation Included
Safety stock = Z × σ_demand × √Lead time. The Z-score corresponds to your target service level (95% service level = Z of 1.65). This calculation is often done on spreadsheets — this tool automates it.
Service Level Input
Set your target in-stock service level (90%, 95%, 99%) and the calculator adjusts safety stock accordingly. Higher service levels require more safety stock.
How it works
Enter average daily sales for the product.
Enter supplier lead time in days.
Enter demand standard deviation (or coefficient of variation if standard deviation is not known).
Set target service level (95% is standard).
The calculator shows: Base ROP, Safety Stock, Total Reorder Point.
Examples
science Fast-Moving Product ROP
Daily sales: 50 units | Lead time: 7 days | Demand std dev: 15 units/day | Service level: 95% (Z=1.65)
Base ROP: 50 × 7 = 350 units
Safety stock: 1.65 × 15 × √7 = 65 units
Reorder point: 415 units