Should I compare on-hand or inventory position with the reorder point?

Inventory position: on-hand plus open orders, less backorders. Comparing on-hand alone fires a second order while the first is still in transit, so both arrive and stock overshoots.

What if on-hand stock runs out before a new order could arrive?

Then ordering now is not enough. At 360 a day, 2,100 units on hand last 5.8 days against a 9-day lead time: expedite, split the delivery or pull an open order in.

How does a longer lead time change the reorder point?

It adds one day of demand for each extra day. Stretching lead time from 9 to 15 days at 145 a day lifts the reorder point from 1,725 to 2,595 units, before any extra safety stock.

Should demand and lead time be in working or calendar days?

Either, as long as both use the same days. If you consume five days a week and the supplier quotes calendar days, convert lead time to working days first, or the reorder point runs high.

Planning calculator

Reorder Point Calculator

Set the trigger that releases a purchase or work order, and check it against stock on hand plus open orders before you release another. You need daily demand, lead time, safety stock, on-hand stock and open orders.

What this calculator does

The stock level that triggers a replenishment order, and whether your inventory position says order now.

Formula used

Lead-time demand = average daily demand × lead time; reorder point = lead-time demand + safety stock
Inventory position = on-hand inventory + open order quantity
Position above reorder point = inventory position − reorder point (negative means order now)
Days until reorder = MAX(position above reorder point, 0) ÷ average daily demand
On-hand days of cover = on-hand inventory ÷ average daily demand, compared with lead time

Inputs explained

Average Daily Demand: Mean daily usage over a recent, representative period.
Lead Time: Days from placing the order to usable stock, including inspection.
Safety Stock: Buffer held for demand and lead-time variation.
On-Hand Inventory: Usable units on hand, less stock already allocated or backordered.
Open Order Quantity: Units on firm purchase or work orders not yet received.

How to use the result

Best suited to loading MRP reorder points after a demand refresh, daily buyer review of items near their trigger.
With weekly or monthly review, add the review period to lead time or the trigger fires late. Takes safety stock as given; size it for your service target with the safety stock calculator.

Current U.S. benchmarks

U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Common questions

Should I compare on-hand or inventory position with the reorder point? Inventory position: on-hand plus open orders, less backorders. Comparing on-hand alone fires a second order while the first is still in transit, so both arrive and stock overshoots.
What if on-hand stock runs out before a new order could arrive? Then ordering now is not enough. At 360 a day, 2,100 units on hand last 5.8 days against a 9-day lead time: expedite, split the delivery or pull an open order in.
How does a longer lead time change the reorder point? It adds one day of demand for each extra day. Stretching lead time from 9 to 15 days at 145 a day lifts the reorder point from 1,725 to 2,595 units, before any extra safety stock.
Should demand and lead time be in working or calendar days? Either, as long as both use the same days. If you consume five days a week and the supplier quotes calendar days, convert lead time to working days first, or the reorder point runs high.

Related guides

Starts Are Sliding at 1,275k: How Building-Products Plants Should Reset Quotes and Inventory Now

Last reviewed 2026-10-01.