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.
Order day = (Iā ā ROP) / d = 7.0
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.
- 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
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.