The trigger says when to reorder. Purchase quantity also depends on supplier minimums, stock space, and demand variability.
Try this with your own numbersFormula and worked example
Reorder point = daily usage × lead time + safety stock
| Input | Example |
|---|---|
| Average daily item usage | 8 |
| Supplier lead time | 7 days |
| Safety stock | 20 items |
| Calculated result | 76 items |
Choose reliable inputs
Plan materials, travel and crew time before committing to a price. For this remodeling contractor calculation, use a completed job sheet, supplier quotes and a crew schedule and a consistent definition of one remodel job.
- Materials: include the portion belonging to this remodel job or reporting period, and record where the value came from.
- Subcontract costs: include the portion belonging to this remodel job or reporting period, and record where the value came from.
- Scope changes: include the portion belonging to this remodel job or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Is a reorder point the same as the order quantity?
The trigger says when to reorder. Purchase quantity also depends on supplier minimums, stock space, and demand variability.
Demand and lead time are averages; safety stock is entered rather than statistically estimated.
What if this input changes?
If average daily item usage rises by 10%, this example changes by 5.6 items. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.