The reorder point is the exact inventory level that triggers a new order. It is calculated to ensure you have enough material to continue production while waiting for the new shipment to arrive, plus an emergency buffer (safety stock) to absorb the shock of late deliveries or unexpected spikes in consumption.
A shop uses 5 sheets of material per day on average, but could use up to 9 sheets on a very busy day. The material typically takes 7 days to arrive from the supplier, but shipping delays have caused it to take up to 12 days in the past.
First, find the maximum possible demand: 9 sheets/day × 12 days = 108 sheets.
Next, find the average demand: 5 sheets/day × 7 days = 35 sheets.
Subtract average from maximum to find your safety buffer: 108 − 35 = 73 sheets of safety stock. Finally, add the safety stock back to your average demand to get your reorder point: 35 + 73 = 108.
Holding too much inventory ties up cash and floor space. Holding too little halts production. Validate your inputs before acting on the calculation.
- MAX OUTLIERSIf your "maximum lead time" is based on a once-in-a-decade supply chain failure, your calculated safety stock will be massive. Use realistic, recurring maximums.
- SHELF LIFEIf the material has an expiration date (like adhesives or pre-catalyzed finishes), ensure your calculated reorder volume can actually be consumed before it spoils.
- MINIMUMSThis calculator tells you when to order, not how much to order. Your order quantity must still respect your supplier's minimum order quantities (MOQ) and freight breaks.