Economic order quantity
Find the balance between ordering and holding costs.
InventoryINVENTORY
Reorder Point & Safety Stock Calculator
Balance average lead-time demand with safety stock for demand and lead-time variability.
Reorder point calculator
Balance average lead-time demand with safety stock for demand and lead-time variability.
YOUR RESULT LIVE CALCULATION
Reorder at inventory position
1,411units
95% CYCLE SERVICEDemand + lead time + a little breathing room.
- Expected lead-time demand
- 1,120 units
- Safety stock (rounded up)
- 291 units
- Buffer coverage
- 3.6 days
- Normal z-score
- 1.6449
Inventory position = on-hand + on-order - backorders.
BEHIND THE NUMBER
How the calculation works
This normal-approximation model assumes independent daily demand and lead-time variation. The selected service level is a cycle service probability, not an order fill rate. Reorder based on inventory position: on-hand plus on-order minus backorders.
ROP = daily demand × lead time + z × √(lead time × demand SD² + daily demand² × lead-time SD²)
When this calculation helps
A reorder point is a trigger to review replenishment, not the amount to purchase. Compare it with a consistently defined inventory position that includes relevant on-order stock and backlog rather than looking only at the warehouse balance.
Check the interpretation
Separate demand variation from lead-time variation and keep both on the same time basis. Intermittent demand and correlated disruptions can defeat the normal approximation. Back-test service and shortages before changing a live planning policy.
Worked example: Reorder Point and Safety Stock: A Practical Example
Good to know
What is safety stock?
Safety stock is the buffer above average lead-time demand. This model estimates it from demand variability, lead-time variability, and a selected cycle service level.
Can I use this for seasonal or intermittent demand?
A stable-demand normal model can be misleading for strongly seasonal or intermittent demand. Use a forecast appropriate to the demand pattern and validate the buffer against historical service.