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Reorder PointCalculator

Calculate your optimal Reorder Point (ROP) to prevent stockouts.

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Demand

Avg. Daily Demand.

Lead Time

Lead Time in Days.

Safety Stock

Safety Stock is the extra amount of stock kept on hand to prevent stockouts due to unexpected demand spikes or delays in lead time.

Calculated Reorder Point (ROP)

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ROP = (Demand *Lead Time) + Safety Stock

Frequently Asked Questions (FAQ) about Reorder Point (ROP)

The Reorder Point (ROP) is a critical inventory management metric.
Here are answers to common questions about how it works and why it matters.

What is the Reorder Point (ROP)?
The Reorder Point (ROP) is the specific inventory level that, when reached, triggers an action to replenish the stock. Essentially, it's the point at which you must place a new order to avoid running out of inventory before the new shipment arrives. It ensures that the current stock lasts exactly until the lead time is over.
What is the standard formula for calculating ROP?
The basic formula for the Reorder Point is:
ROP = (Average Daily Demand \times Lead Time) + Safety Stock
Average Daily Demand: The average number of units sold or used per day.
Lead Time: The time (in days) it takes for a supplier to deliver the order after it has been placed.
Safety Stock: The extra buffer inventory held to prevent stockouts during unexpected variations in demand or delays in delivery.
Why is ROP important for my business?
ROP is crucial because it helps maintain a healthy balance between holding too much stock (which increases storage costs and risk of obsolescence) and holding too little stock (which leads to costly stockouts, lost sales, and unhappy customers). Calculating an accurate ROP is key to optimizing cash flow and ensuring customer satisfaction.
How does Lead Time affect the ROP calculation?
Lead Time is one of the most critical factors. The longer the lead time, the higher your ROP must be. This is because you need enough inventory on hand to cover the entire duration it takes for the new order to arrive. A two-day lead time requires less cover stock than a 14-day lead time.
What is Safety Stock and why is it added to the ROP?
Safety Stock (SS) is the inventory cushion added to the ROP calculation. It protects you from the uncertainties of the real world—like a sudden surge in customer demand or an unexpected delay from your supplier. By adding Safety Stock, you ensure that you have a high probability of not running out of inventory even during these disruptive events.
What's the difference between ROP and Reorder Quantity (ROQ)?
ROP (Reorder Point) answers the question: "When do I reorder?" (Based on inventory level). ROQ (Reorder Quantity) answers the question: "How much do I reorder?" (Often determined by the Economic Order Quantity, or EOQ). ROP tells you when to pull the trigger; ROQ tells you how many bullets to load.