Reorder Point Calculator: Safety Stock and EOQ
Calculate reorder point (ROP), safety stock, and economic order quantity (EOQ) to eliminate both stockouts and overstock. Know exactly when to reorder and how much.
How the calculation works
- Safety stock
z-score for your service level times the square root of (lead time x demand std dev squared + daily demand squared x lead time std dev squared), rounded up. It covers both demand swings and late deliveries.
- Reorder point
Average daily sales times average lead time, plus safety stock. When on-hand stock falls to this number, place the next order.
- Economic order quantity
Square root of (2 x annual demand x order cost) divided by (unit cost x annual holding %). It balances the cost of placing orders against the cost of holding stock; at EOQ the two annual costs are about equal.
Lead time variability can drive safety stock more than demand variability. With the default inputs, the lead time term (5 squared x 10 squared = 2,500) is far larger than the demand term (45 x 2 squared = 180), so a more reliable supplier cuts safety stock more than smoother demand would.
Keep going
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