Reorder point

The reorder point is the stock level at which you place a new order, so the stock you hold lasts through the supplier lead time with a buffer left.

By Berend Vrakking, founder of Product Metrics. Updated 7 October 2026.

Formula

Reorder point = daily demand × lead time in days + safety stock

Daily demand is the average units sold per day. Lead time is the days from placing the order to receiving the stock. Safety stock is the extra stock you hold in case demand or delivery varies.

Example

Worked example, one product
Step	Value
Product	Trail Runner 2
Daily demand	20 units
Supplier lead time	14 days
Demand during lead time (20 × 14)	280 units
Safety stock (5 days × 20)	100 units
Reorder point (280 + 100)	380 units

When stock of Trail Runner 2 falls to 380 units, place the order. If demand holds at 20 units a day, 100 units are still on the shelf when the delivery lands. Illustrative data.

For one product, and for an account

A reorder point belongs to one product, because daily demand and supplier lead time differ for every product. One threshold for the whole shop, such as “reorder at 50 units”, warns too late for a fast seller with a slow supplier and too early for a slow seller with a fast one.

Inventory Insights skips the fixed threshold. It projects demand per product and works back from the supplier lead time and a safety buffer to a reorder date, then leaves the decision to order with you.

Common mistake

Setting a reorder point once and trusting it forever. The right level depends on that product’s demand and its supplier’s lead time, and both drift, so a level that was right in spring can be wrong by autumn.

Questions

How is the reorder point calculated?

Multiply average daily demand by the supplier lead time in days, then add safety stock. With 20 units sold a day, a 14-day lead time and 100 units of safety stock, the reorder point is 20 × 14 + 100 = 380 units.

What is the difference between a reorder point and safety stock?

The reorder point is the stock level that triggers a new order. Safety stock is one part of it: the extra units that cover demand or delivery that runs above plan. The other part is the demand expected during the lead time.

What is the difference between a reorder point and a reorder date?

A reorder point is a stock level; a reorder date is the day you expect to reach it. Inventory Insights works in dates.

Keep reading

Safety stockThe buffer that is added to demand during the lead time.
Lead timeThe days between ordering and receiving stock.
StockoutWhat a reorder point is meant to prevent.
Inventory InsightsSee a reorder date per product.
Dead stock inventoryReorder from sales, lead time and a buffer, so stock does not go dead.