Reorder Point & Safety Stock Calculator
The stock level at which you place the next order — set so that demand spikes and late deliveries do not leave you empty.
—
How it works
The reorder point covers expected demand during the lead time, plus a buffer for the times when demand runs high or the supplier runs late. Without the buffer you stock out roughly half the time, because average demand is exceeded about half the time by definition.
The size of that buffer is a service-level decision, and the cost curve is steep at the top. Moving from 95% to 99% availability roughly doubles the safety stock, which is why chasing the last few percent of service level is usually the wrong call outside of critical items.
Reorder point = average demand × lead time + Z × σ × √(lead time)
- Lead time — days between placing an order and receiving it
- σ — the standard deviation of daily demand — how erratic sales are
- Z — the service-level factor: 1.65 for 95%, 2.33 for 99%
Worked example
85 units a day with a standard deviation of 22, a 12-day lead time and a 95% service level
Inputs
Results
Raising the service level to 99% pushes safety stock from 126 to 178 units — 41% more capital for four points of availability.
Frequently asked questions
How do I find the standard deviation of demand?
From your own sales history: take daily or weekly units over several months and calculate the deviation in a spreadsheet. A rough substitute is a quarter of the gap between your busiest and quietest typical day.
What service level should I target?
95% suits most items. Go to 98–99% for critical components where a stockout halts production, and drop to 90% for slow-moving or easily substituted lines where holding cost outweighs the risk.
Should lead time variability be included too?
Ideally yes — a supplier whose delivery times swing widely needs more buffer than one who is reliably slow. If your lead times are erratic, add a few days to the lead time input as a practical approximation.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.
More in Business Utilities
Economic Order Quantity Calculator
The order size that costs least overall — balancing the cost of ordering often against the cost of holding stock.
BusinessLease vs Buy Calculator
Compare the two properly — in today’s money, with the residual value and tax relief that make the headline comparison misleading.
BusinessBusiness Loan Calculator
What the loan costs, what it really costs after fees — and whether the business generates enough to service it comfortably.
BusinessCurrency Converter
Convert at the rate you were quoted and see the real cost — the spread and fees that a plain conversion hides.
BusinessBusiness ID Validator
Check an identifier’s checksum before a payment goes out — catching a mistyped digit here is considerably cheaper than catching it afterwards.