What This Calculator Estimates
This calculator estimates your inventory reorder point — the stock level at which you should place a new order — based on average daily sales, supplier lead time, and a safety stock buffer.
Formula / Method Used
Safety Stock = Daily Sales × Safety Buffer Days. Reorder Point = (Daily Sales × Lead Time Days) + Safety Stock.
Worked Example
Selling 20 units/day with a 10-day supplier lead time and a 5-day safety buffer gives a safety stock of 100 units and a reorder point of 300 units — order when stock hits 300.
How to Interpret the Result
When your on-hand inventory drops to this level, place your next order. This timing accounts for both the normal wait for delivery and a buffer against demand spikes or shipping delays.
Common Mistakes
- Using average daily sales without accounting for seasonal spikes.
- Underestimating true supplier lead time, including processing delays.
- Skipping safety stock entirely and risking stockouts.
- Not revisiting the reorder point as sales volume changes over time.
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Frequently Asked Questions
What does this inventory manager calculate?
It estimates your reorder point and safety stock level based on daily sales, lead time, and desired safety buffer.
What is a reorder point?
The reorder point is the inventory level at which you should place a new order to avoid running out before the next shipment arrives.
What is safety stock?
Safety stock is extra inventory held as a buffer against unexpected demand spikes or supplier delays.
How do I estimate lead time?
Lead time is the number of days between placing an order and receiving it, based on your supplier's typical delivery schedule.
Why does this matter for cash flow?
Ordering too early ties up cash in excess inventory, while ordering too late risks stockouts and lost sales.
Last updated: July 2026