ARVENIXMore Tools

Inventory Planning

Reorder Point Visualizer

See how inventory depletion, lead time and safety stock determine the point where a replenishment order should be placed.

Reorder point and safety stock

Adjust the assumptions and watch the order point move.

05101520075150225300Safety stockReorder point4.0 days lead timeUnitsDays
Reorder point120 units
Order day7.0
Arrival day11.0
Inventory at arrival40
ROP = dL + SS = (20)(4) + 40 = 120 units
Order day = (Iā‚€ āˆ’ ROP) / d = 7.0
Iā‚€
260
units
d
20
units/day
L
4.0
days
SS
40
units

This simple model assumes constant daily demand and a fixed lead time.

How reorder point works

Reorder point answers one operating question: how low can inventory fall before a replenishment order must be placed so new material arrives before available stock is exhausted?

Lead-time demand

Daily demand multiplied by supplier lead time estimates how many units will be consumed while the next order is being produced and delivered.

Safety stock

Safety stock is the buffer above expected lead-time demand. It protects against demand spikes, receiving delays, supplier variability and forecast error.

The reorder trigger

When available inventory reaches the reorder point, replenishment should be triggered. Ordering too late creates stockout risk. Ordering too early can unnecessarily increase working capital.

What better data changes

A live operating model can replace fixed assumptions with actual consumption, supplier lead-time performance, open purchase orders, allocated demand and inbound inventory.

Calculation
Reorder Point = Average Daily Demand Ɨ Lead Time + Safety Stock
  • d = average units consumed per day
  • L = supplier lead time in days
  • SS = safety stock held as protection against variability
  • ROP = inventory level that triggers the next order
Example using the current visualizer

At 20 units per day and 4 days of lead time, expected lead-time demand is 80 units. Adding 40 units of safety stock produces a reorder point of 120 units.