Demand and lead time
Order quantity (optional)
Fill this in if you want the economic order quantity
Result
Reorder point
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Once stock drops to this level, place the order
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Safety stock = (maximum demand × maximum lead time) − (average demand × average lead time). The max-value method covers the worst case: demand spikes and the delivery is late in the same period. It is simpler than statistical methods and needs no sales history — only a sense of your extremes.
Reorder point = average demand × average lead time + safety stock. As soon as stock falls to this level it is time to order: the incoming batch will arrive before the shelf runs empty.
Economic order quantity (the Wilson formula, EOQ) = √(2 × annual demand × order cost ÷ holding cost per unit per year). It is a balance: ordering often in small batches is expensive in processing, ordering rarely in large batches is expensive in storage and frozen cash.
Annual demand comes from the average: average demand × 365. Interval between orders = 365 ÷ orders per year — a convenient number for a recurring reminder to the buyer.