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💰 Financial · Rex's Toolbox

Reorder Point & Safety Stock Calculator

When to reorder and how much buffer stock to hold.

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Rex says

Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.

Try a scenario

Click to load — tweak from there.

Inputs

Result

Reorder point (units)

3,355

Safety stock (units)

835

Cycle stock during lead time

2,520

Days of cover in safety stock

7.0

Capital tied up in safety stock

$7,098

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How to use this

  1. 1Enter average daily demand (units).
  2. 2Enter daily demand std deviation.
  3. 3Enter lead time (days).
  4. 4Enter lead time std deviation (days).
  5. 5Enter service level.
  6. 6Enter unit cost ($).
  7. 7Read your reorder point (units) on the right — it updates as you type.
  8. 8Hit Share to keep the scenario or send it to someone.

About this calculator

Stockouts come from variability, not averages. Safety stock sizes the buffer from demand and lead-time variability at your chosen service level, and the reorder point tells you the on-hand quantity that should trigger a purchase order.

FormulaSafety stock = Z × √(LT × σd² + d² × σLT²); ROP = average demand × lead time + safety stock.

Worked example

Using the values the calculator loads with:

Inputs

  • Average daily demand: 120 units
  • Daily demand std deviation: 35
  • Lead time: 21 days
  • Lead time std deviation: 4 days
  • Service level: 95% (Z = 1.65)
  • Unit cost: 8.5 $

Results

  • Reorder point (units): 3,355
  • Safety stock (units): 835
  • Cycle stock during lead time: 2,520
  • Days of cover in safety stock: 7
  • Capital tied up in safety stock: $7,098

What each field means

Inputs

Average daily demand (units)
The average daily demand used in the calculation, measured in units. Starts at 120 units so you have a working example on load.
Daily demand std deviation
The daily demand std deviation used in the calculation. Starts at 35 so you have a working example on load.
Lead time (days)
The lead time used in the calculation, measured in days. Starts at 21 days so you have a working example on load.
Lead time std deviation (days)
The lead time std deviation used in the calculation, measured in days. Starts at 4 days so you have a working example on load.
Service level
Pick the option that matches your situation — the maths changes per option. Choices: 90% (Z = 1.28), 95% (Z = 1.65), 98% (Z = 2.05), 99% (Z = 2.33).
Unit cost ($)
The unit cost used in the calculation, measured in $. Starts at 8.5 $ so you have a working example on load.

Results

Reorder point (units)
Returned as a whole number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Safety stock (units)
Returned as a whole number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Cycle stock during lead time
Returned as a whole number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Days of cover in safety stock
Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Capital tied up in safety stock
Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.

FAQ

Why does lead-time variability matter so much?

It is multiplied by average demand, so a supplier that swings four days on a 120-unit-a-day SKU contributes far more variance than day-to-day demand noise.

Is a higher service level always better?

No. Going from 95 to 99 percent raises safety stock by about 40 percent for one-tenth the stockout reduction. Reserve high service levels for A items.

Accuracy and limitations

  • Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
  • Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
  • This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.

Cite this calculator

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APA
RevenueLab. (2026). Reorder Point Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/inventory-reorder-point
HTML
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/inventory-reorder-point" target="_blank" rel="noopener">Reorder Point Calculator — RevenueLab</a> (2026).</p>
Markdown
Source: [Reorder Point Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/inventory-reorder-point) (2026).
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