Accounting Stock Reorder Point Calculator
Calculate the inventory level at which you should place a new order, including safety stock and the estimated value of stock at that point.
Overview
This Accounting Stock Reorder Point Calculator estimates the inventory level that should trigger a new purchase order. Enter average daily usage, supplier lead time, a safety-stock buffer, and unit cost to see both the reorder quantity and its estimated inventory value.
How it works
The calculator first estimates demand during the supplier lead time by multiplying average daily usage by lead time in days. It then adds safety stock to produce the reorder point. Multiplying that quantity by the cost per unit estimates the stock value at the reorder trigger. This approach helps separate expected lead-time demand from the additional buffer held for uncertainty.
How to use this calculator
- 1Enter the average number of units used or sold per day.
- 2Add your supplier's typical lead time in days.
- 3Set a safety-stock quantity for demand or delivery uncertainty.
- 4Enter the cost carried per unit of inventory.
- 5Use the reorder point as the stock level that triggers a new order.
Example Calculation
Average daily usage
25
Supplier lead time
14
Safety stock
100
Cost per unit
$13
Reorder point
450 units
At 25 units per day, demand over a 14-day lead time is 350 units. Adding 100 units of safety stock gives a reorder point of 450 units, with an estimated value of 5,625.00.
Frequently asked questions
What is a stock reorder point?
A stock reorder point is the inventory level at which you place a new order so that replacement stock can arrive before you run out.
How is the reorder point calculated?
It is calculated as average daily usage multiplied by supplier lead time, plus the safety-stock quantity.
What is safety stock?
Safety stock is extra inventory held to help cover unexpected increases in demand, supplier delays, or other uncertainty.
Should I use sales or usage for average daily demand?
Use the measure that best represents stock leaving inventory, such as average sales, production consumption, or warehouse issues.
Why does the calculator show reorder-point value?
The value estimates the inventory cost represented by the reorder trigger, which can support cash-flow and inventory-value planning.
Does the reorder point tell me how much to order?
No. The reorder point tells you when to order. Order quantity usually depends on demand, supplier minimums, storage space, and purchasing policy.
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Assumptions and warnings
Assumptions
- Average daily usage is representative of expected demand throughout the lead time.
- Supplier lead time is measured in calendar days and remains broadly consistent.
- Safety stock is set separately to cover demand variation, delivery delays, or both.
- The unit cost entered is consistent with the inventory valuation method used in your records.
- Results are planning estimates and do not include order quantities, storage capacity, or supplier minimum-order rules.
Warnings
- This calculator provides an inventory-planning estimate only and is not accounting, tax, or financial advice.
- Review reorder settings regularly when demand patterns, supplier lead times, costs, or service-level targets change.