Question 1

What is a reorder point?

Accepted Answer

A reorder point is the inventory level at which you should place a new order with your supplier. When your stock drops to this level, it signals that it's time to reorder to avoid running out of inventory before the new shipment arrives. The reorder point accounts for your sales velocity, supplier lead time, and a safety buffer.

Question 2

How do I calculate reorder point?

Accepted Answer

The reorder point formula is: Reorder Point = (Average Daily Sales x Lead Time) + Safety Stock. For example, if you sell 10 units per day, have a 7-day lead time, and want 3 days of safety stock, your reorder point would be: (10 x 7) + (10 x 3) = 100 units. When your inventory drops to 100 units, place your next order.

Question 3

What is safety stock and why is it important?

Accepted Answer

Safety stock is extra inventory kept as a buffer against unexpected demand spikes or supplier delays. It protects you from stockouts when sales exceed forecasts or deliveries are late. A typical safety stock is 3-7 days worth of average sales, but high-demand or long-lead-time products may need more.

Question 4

How many days of safety stock should I keep?

Accepted Answer

Most e-commerce businesses keep 3-7 days of safety stock. Consider keeping more (7-14 days) if: your supplier has unreliable delivery times, your product has seasonal demand spikes, or stockouts would significantly hurt your business. Keep less (1-3 days) if storage costs are high or products expire quickly.

Question 5

How do I calculate average daily sales?

Accepted Answer

To calculate average daily sales, divide your total sales over a period by the number of days. For example, if you sold 300 units in the last 30 days, your average daily sales is 300 / 30 = 10 units per day. Use a longer period (60-90 days) for more stable products, and a shorter period (14-30 days) for trending items.

Question 6

Is this calculator free to use?

Accepted Answer

Yes, our reorder point calculator is completely free to use. No signup is required, you get instant results, and your data stays private - all calculations happen in your browser without being sent to any server.

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