Calculator methodology
Reorder-Point Formula and Limitations
A simple planning formula is useful only when its inputs and limits remain visible.
Decision supported
This method helps a shop identify when the inventory position for one SKU has reached a replenishment review threshold. It does not select a supplier, calculate an order quantity, or approve spending.
Inputs
- Average weekly unit demand: units consumed or sold in a recent week that the shop considers representative.
- Supplier lead time in days: elapsed time from placing an order until units are available to use.
- Safety stock: a whole-unit buffer selected by the shop.
- Current on-hand units: usable inventory physically available now.
- Open purchase-order units: confirmed incoming inventory not yet on hand.
Formula
lead-time demand = weekly demand / 7 x lead-time days
reorder point = ceil(lead-time demand + safety stock)
net available = on hand + open purchase orders
The calculator recommends a reorder review when net available inventory is less than or equal to the reorder point.
Worked example
If average weekly demand is 14 units, lead time is 7 days, and safety stock is 5 units:
- Lead-time demand is
14 / 7 x 7 = 14units. - Reorder point is
ceil(14 + 5) = 19units. - Net available inventory of 18 or 19 triggers a reorder review.
- Net available inventory of 20 does not trigger the threshold.
This example demonstrates the calculation only. It is not a recommended stocking level for a particular device or part.
Validation boundaries
The browser tool accepts weekly demand from 0.01 to 100,000 units, lead time from 0.1 to 365 days, safety stock from 0 to 100,000 whole units, and inventory counts from 0 to 1,000,000 whole units. These broad technical limits catch common entry errors; they do not certify that a value is operationally reasonable.
Known limitations
This simple model does not calculate demand variability, service levels, minimum order quantities, case packs, returns, defects, obsolete models, cash limits, seasonality, supplier reliability, substitute parts, or order quantity. Open purchase orders are treated as available for the comparison even though delayed or uncertain orders may require separate judgment.
Review cadence
Recalculate when the demand window, supplier path, lead time, safety-stock policy, or open-order confidence changes. Record those assumptions with the result so later reviewers can reproduce it.