Inventory Reorder Point & EOQ Calculator
Calculate when to reorder inventory based on demand and lead time.
Formula
Reorder Point = (Daily Demand x Lead Time) + Safety Stock. Safety Stock = Z-score x Std Dev x sqrt(Lead Time). EOQ = sqrt(2 x Annual Demand x Order Cost / Holding Cost Per Unit).
Frequently Asked Questions
What is the Economic Order Quantity (EOQ)?
EOQ is the optimal order quantity that minimizes total inventory costs (ordering costs + holding costs). The formula is EOQ = sqrt(2 x Annual Demand x Order Cost / Holding Cost Per Unit). It balances the trade-off between ordering frequently (high ordering cost) and ordering in bulk (high holding cost).
How do I calculate safety stock?
Safety Stock = Z-score x Standard Deviation of Demand x sqrt(Lead Time). The Z-score corresponds to your desired service level: 1.28 for 90%, 1.65 for 95%, 1.96 for 97.5%, 2.33 for 99%. Higher service levels require more safety stock.
What is a reorder point?
The reorder point is the inventory level at which you should place a new order. It equals Average Daily Demand x Lead Time + Safety Stock. When your inventory hits this level, it is time to reorder to avoid stockouts.
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