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Reorder Point: How to Know When to Restock from Suppliers

A reorder point helps you replenish stock at the right time, reducing stockouts and excess inventory. Learn how to calculate and apply it.

The reorder point is the stock level that signals when to place a new supplier order before an item runs out. A common formula is average daily demand multiplied by supplier lead time, plus safety stock when needed. For example, 10 units of daily demand and a five-day lead time produce a base reorder point of 50 units before safety stock.

Review sales patterns and delivery times regularly, especially for fast-moving products. Try Cash Cloud for free to explore sales and inventory management tools.

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