Accounting Stock Reorder Point (Monthly) Calculator
Calculate the stock level at which you should reorder inventory using average monthly demand, supplier lead time, safety stock and current inventory.
Overview
Use this monthly stock reorder point calculator to estimate when to replenish inventory. Enter average monthly usage, expected supplier lead time, your preferred safety stock buffer, and current available stock to see a suggested reorder threshold.
How it works
The calculator first estimates the number of units likely to be used during the supplier lead time by multiplying average monthly usage by lead time in months. It then adds safety stock to create the reorder point. When available stock reaches this level, a replenishment order should normally be triggered. The stock-needed result compares the reorder point with your current available inventory.
How to use this calculator
- 1Enter the average number of units used or sold each month.
- 2Add the supplier lead time in months, including any normal handling time.
- 3Set a safety stock level to protect against routine demand or delivery variation.
- 4Enter the stock currently available for sale or use.
- 5Review the reorder point and the units needed to return current stock to that level.
Example Calculation
Average monthly stock usage
500
Supplier lead time
1.5
Safety stock
100
Current available stock
650
Recommended reorder point
850 units
Average lead-time demand is 750 units (500 × 1.5). Adding 100 units of safety stock gives a reorder point of 850 units. With 650 units available, 200 units are needed to return stock to the reorder point.
Frequently asked questions
What is a stock reorder point?
A reorder point is the inventory level that signals it is time to place a new purchase order. It is designed to cover expected demand during the time it takes for replacement stock to arrive, plus a buffer.
How is the monthly reorder point calculated?
It is calculated as average monthly usage multiplied by supplier lead time in months, plus safety stock. Reorder point = monthly usage × lead time + safety stock.
What should I use for average monthly stock usage?
Use a representative average of units sold, consumed, or issued each month. A longer historical period may smooth out one-off fluctuations, while recent data may better reflect changing demand.
What is safety stock and why is it included?
Safety stock is extra inventory held to reduce the risk of running out when demand is higher than expected, deliveries are delayed, or stock records are not exact.
Does the reorder point tell me how much to order?
Not by itself. This calculator shows how many units are needed to bring current stock back to the reorder point. Your final order quantity may also depend on forecast demand, order minimums, pack sizes, storage capacity, and open orders.
Should open purchase orders be included in current stock?
Usually, current available stock should be entered separately from stock already on order. You can adjust your ordering decision by considering confirmed incoming quantities and their expected delivery dates.
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Assumptions and warnings
Assumptions
- Monthly stock usage is reasonably representative of expected demand during the supplier lead time.
- Supplier lead time is measured from placing an order until stock is available for sale or use.
- Safety stock is set separately to cover normal uncertainty in demand, deliveries, or stock records.
- The calculation uses available inventory and does not automatically account for open purchase orders, committed stock, or seasonal demand changes.
Warnings
- This calculator provides an inventory planning estimate only; review actual demand patterns, supplier reliability, stock commitments, and purchasing constraints before ordering.