Worked examples
Two-week overseas lead time
| Average daily sales | 20 |
| Supplier lead time | 14 |
| Safety stock | 60 |
| Reorder point | 340 |
| Sales during lead time | 280 |
Reorder at 340 units — 280 cover the wait, 60 absorb surprises.
Fast domestic supplier
| Average daily sales | 20 |
| Supplier lead time | 4 |
| Safety stock | 25 |
| Reorder point | 105 |
| Sales during lead time | 80 |
Short lead times slash the trigger level and the cash parked in stock.
Frequently asked questions
What should lead time include?
The full clock from placing the order to units being sellable: supplier production or picking, transit, customs if importing, receiving, and putaway at your warehouse or 3PL. Merchants who count only the shipping days consistently reorder too late. Measure a few recent orders end to end and use the realistic total, not the supplier’s quoted number.
What happens if I reorder below the reorder point?
You stock out during the lead time. Every day of delay past the trigger costs you a day of sales at the end of the cycle — and stockouts cost more than the lost orders, because marketplace rankings and ad campaigns lose momentum that takes weeks to rebuild. If stock is already below the point, order immediately and consider expedited freight.
How often should I recalculate reorder points?
Whenever either input moves: review daily sales monthly (or weekly in Q4), and update lead time after any supplier change or shipping disruption. A reorder point set on January’s sales rate will trigger far too late in November. Many merchants keep a simple spreadsheet per SKU and refresh it on the first of each month.
Does this work with several suppliers for the same product?
Compute a reorder point per supplier lane using that lane’s lead time, and trigger on the one you actually plan to order from. A common pattern is a cheap slow lane (sea freight, high reorder point) for baseline volume plus a fast expensive lane (air, low reorder point) held in reserve for emergencies when the slow lane slips.
Related calculators
- EOQ Calculator
- Safety Stock Calculator
- Inventory Turnover Calculator
- Break-even ROAS Calculator
- All calculators
Part of the Inventory collection.