Reorder Point Formula:
How to Calculate It (+ Calculator)
The reorder point is the stock level that should trigger your next purchase order. The formula is simple — average daily sales × lead time, plus safety stock — and this guide walks through it with a worked example and a free calculator.
By Replenagise · Updated 11 July 2026 · 6 min read
The reorder point formula
Reorder Point (ROP) = (Average Daily Sales × Supplier Lead Time in Days) + Safety Stock
The first half — lead-time demand — is what you expect to sell while you wait for the next delivery. If you sell 5 units a day and your supplier takes 20 days, you will sell through 100 units between placing the PO and receiving it, so you must reorder before stock falls to 100. The second half, safety stock, is the buffer for the days demand spikes or the shipment slips. Reorder at lead-time demand plus buffer, and you receive new stock just as the buffer would have started to burn.
Reorder Point Calculator
Enter your average daily sales, supplier lead time, and safety stock to get the stock level that should trigger your next PO.
Use stockout-adjusted daily sales (exclude out-of-stock days) and the supplier's actual delivered lead time, not the quoted one.
Worked example: from sales data to trigger level
1. Measure true daily sales
A SKU sold 450 units over the last 90 days — but was out of stock for 15 of them. True velocity is 450 ÷ 75 = 6 units/day, not 5. Always exclude stockout days or the formula quietly under-orders.
2. Use the real lead time
The supplier quotes 14 days, but the last five POs averaged 18 days door-to-door. Use 18 — the reorder point protects you against reality, not the quote.
3. Add safety stock
Demand swings and the occasional late shipment justify a buffer of, say, 25 units (see our safety stock guide for how to size it properly rather than guessing).
4. The trigger level
ROP = (6 × 18) + 25 = 133 units. When stock on hand (plus anything already on order) drops to 133, the purchase order goes out. Below that, every day of delay is spent buffer.
One SKU is easy. Two thousand is the actual job.
The formula takes thirty seconds per SKU — which is exactly the problem. Real catalogs have hundreds or thousands of SKUs, each with its own velocity, its own supplier lead time, and seasonality that shifts the numbers every month. A reorder point calculated once and left in a spreadsheet is stale within weeks.
Replenagise runs this calculation continuously on every SKU: stockout-adjusted velocity, per-supplier lead times, seasonal adjustment, and safety stock — recalculated as sales come in, with the purchase order raised automatically into Shopify or Linnworks when the trigger is hit. The formula below is the logic; the software is the scale.
Next: size the buffer properly with the safety stock formula, work out how much to order with the EOQ formula, or let inventory replenishment software run the whole loop.
Reorder Point — FAQs
What is a reorder point?
The reorder point is the inventory level that triggers a new purchase order. It equals the stock you expect to sell during the supplier’s lead time, plus safety stock as a buffer — so replacement stock arrives just before you would otherwise run out.
How do you calculate the reorder point?
Multiply average daily sales by the supplier lead time in days, then add safety stock: ROP = (Daily Sales × Lead Time) + Safety Stock. Use stockout-adjusted sales (exclude out-of-stock days from the average) and the supplier’s actual delivered lead time, not the quoted one.
What is the difference between reorder point and reorder quantity?
The reorder point answers when to order; the reorder quantity answers how much. Quantity comes from a separate calculation — demand over the cover period, EOQ, or MOQ constraints. Replenagise computes both per SKU and puts them on the same suggested purchase order.
Can reorder points be automated?
Yes. Replenagise recalculates reorder points continuously per SKU from live Shopify and Linnworks data — stockout-adjusted velocity, lead times, seasonality, and safety stock — and raises the PO automatically when stock hits the trigger. No spreadsheet maintenance required.
Reorder Points on Autopilot, for Every SKU
Live-recalculated triggers, safety stock, and purchase orders raised automatically into Shopify and Linnworks.