Reorder Point & EOQ Calculator

What these three numbers mean

Safety stock is the extra inventory you hold to cover unexpected spikes in demand or delays in delivery — it's the buffer between "just enough" and "running out." Reorder point is the stock level at which you should place a new order, so it arrives before you run out, accounting for that safety buffer. Economic order quantity (EOQ) is a different question entirely — not when to reorder, but how much to order each time to minimize the combined cost of ordering too often (order costs) and holding too much stock (holding costs).

How to use this calculator

For reorder point and safety stock, you need four numbers: your average daily usage, your average lead time (how many days it normally takes a new order to arrive), and the worst-case versions of both — maximum daily usage and maximum lead time. These worst-case numbers are what create the safety buffer. For EOQ, you need your annual demand in units, the cost to place a single order (shipping, processing, etc. — not the cost of the goods themselves), and your holding cost per unit per year (storage, insurance, spoilage risk, and the opportunity cost of capital tied up in inventory).

Worked examples

If you use 40 units a day on average with a 7-day average lead time, but usage can spike to 60/day and lead time can stretch to 10 days, your safety stock is (60 × 10) − (40 × 7) = 320 units, and your reorder point is 280 + 320 = 600 units — meaning you should reorder once stock falls to 600 units.

If you sell 10,000 units a year, each order costs $50 to place, and holding a unit costs $2 a year, the economic order quantity works out to about 708 units per order — ordering roughly 14 times a year, for a combined annual ordering-plus-holding cost of about $1,414.

Common mistakes

The most common mistake is using your average lead time and average usage for both the reorder point AND the safety buffer — if you do that, you have no buffer at all, and any spike in demand or delay in delivery will stock you out before the new order arrives. The safety stock calculation specifically exists to cover that gap using your worst-case numbers, not your averages. A second common mistake with EOQ is forgetting that it assumes fairly steady, predictable demand — for highly seasonal or unpredictable products, EOQ is still a useful starting point, but it shouldn't be followed blindly without adjusting for known seasonal swings.