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Get startedReorder point
The stock level that should trigger a new purchase order.
The reorder point is the inventory level at which you should place a new order, so fresh stock arrives before you sell out. It covers expected demand during the supplier's lead time, plus a safety buffer for demand spikes and delays.
Formula
Reorder point = (Avg daily sales × Lead time) + Safety stock
Example: (20/day × 14 days) + 100 = 380 units.
What a good result depends on
Set so you rarely stock out but don't tie up excess cash in stock.
Common mistakes
- Setting safety stock to zero.
- Using lead times that don't reflect peak-season delays.