Reorder point & safety stock calculator
Reorder point = average daily sales × average lead time + safety stock, where safety stock covers your worst observed demand across your worst observed lead time. Cross-border sellers stock out not because demand spikes but because lead times do — a customs hold turns a 30-day resupply into 45 and eats the buffer domestic formulas would hold. Enter your numbers below; every step of the math is shown.
Reorder when stock hits 900 units (≈75 days of average sales), holding 540 units as safety stock.
- Lead-time demand (12/day × 30 days) Calculation360 units
- Safety stock (max 20/day × max 45 days − average demand) Calculation540 units
Assumption: Max-method safety stock: covers the worst observed demand × worst observed lead time. Simple and auditable; statistical (z-score) methods can hold less stock at a chosen service level.
- Cross-border lead-time spikes (customs holds, port delays) move max lead time — the single biggest driver of safety stock.
- If sales are seasonal, use the season's numbers, not the annual average.
Why the max-method (and when not to use it)
We use the max-method — worst demand × worst lead time — because it's fully auditable from four numbers you actually have. It holds more stock than statistical (z-score) safety stock at a chosen service level; if you have clean daily-demand history and care about capital efficiency, a statistical model can carry less. The max-method is the honest default when your data is thin, which is most sellers in year one.
Feed the result into your cash planning: safety stock × unit cost is capital sitting still. The cash conversion cycle calculator shows what that buffer does to your funding needs.
Common questions
- Should lead time include customs clearance?
- Yes — measure order-placed to sellable-in-stock, including freight, clearance, and inbound processing at your warehouse or 3PL. The worst-case number should be one you've actually experienced, not a guess.