Reorder point · EOQ

Reorder point, safety stock and EOQ calculator

Place the next order before the long sea leg empties the tank.

Enter weekly demand, lead time in weeks and a service level, and get safety stock, reorder point and EOQ.

Last updated 2026-09-27. Math runs in your browser, no data leaves your computer.

Use weekly figures throughout, since lead times from China are quoted in weeks and weekly usage smooths out the odd big day. Pull demand from your consumption or sales records, not from the forecast, because the standard deviation has to reflect what actually happened.

Use the unit you count on the shelf, and keep the unit cost below in the same unit.

Average several months of weekly usage, so one quiet holiday week does not drag the figure down.

In a spreadsheet this is STDEV.S over the same weekly figures, and it drives most of the safety stock when demand is lumpy.

Count from the day you place the purchase order to goods in your warehouse, covering production, inland trucking, the sea leg, clearance and delivery.

Work it out from your last shipments, because rolled sailings and customs holds are the variation that usually empties the store.

This is the chance of not running out in a replenishment cycle, and each step up costs more safety stock than the one before.

Order size (EOQ, optional)

Fill these three fields to get the economic order quantity. All three are specific to your business, so take them from your purchasing and finance figures rather than a rule of thumb.

Include the fixed costs each order triggers, such as broker fees, documentation, bank charges and receiving labor, but not the freight that scales with volume.

Use the landed cost per stock unit, since holding cost is charged on the money tied up in the warehouse.

Your finance team sets this from the cost of capital, storage, insurance and shrinkage, so ask them rather than borrowing another company's figure.

Add open purchase orders that have not arrived, because the inventory position is what you compare against the reorder point.

Before the booking, screen the name on the invoice. Shipment pre-check is on the paid plans, from USD 59 a month.

General guidance only. Verify against the cited primary sources before you commit to a shipment, declaration, or contract.

How the reorder point is built

A reorder point that only covers average demand over the average lead time runs out about half the time, because half of all replenishment cycles are busier or slower than average. With a sea leg in the middle, a single rolled sailing can add a week or two, and the line stops while the container sits at the transhipment port.

The tool combines both sources of risk into one standard deviation of demand over the lead time, sigma_LT = square root of (L x sigma_d squared + d squared x sigma_L squared). Safety stock is z times sigma_LT, and the reorder point is weekly demand times lead time plus that safety stock. EOQ is the square root of 2 times annual demand times cost per order, divided by the annual holding cost per unit, with annual demand taken as 52 weeks of the weekly average.

These are the standard textbook formulas found in Silver, Pyke and Thomas, Inventory and Production Management in Supply Chains (4th edition, CRC Press, 2017), and the EOQ goes back to Harris in 1913. The z values are the normal distribution critical values published in the NIST/SEMATECH e-Handbook of Statistical Methods, which assume demand over the lead time is roughly normal.

Worked example: a 10 week lead time that slips

The booking. A plant uses an average of 2,000 kg a week of an imported additive with a weekly standard deviation of 600 kg, and the factory to warehouse lead time is 10 weeks. The planner sets safety stock at a 95% service level from demand variation alone, 1.645 x 600 x square root of 10 = 3,121 kg, so the reorder point is 23,121 kg and it looks fine on paper.

The failure. Lead times on that lane have swung by a standard deviation of 2 weeks, and the next container is rolled to a later vessel, so the replenishment takes 12 weeks and the plant needs 24,000 kg to bridge it. Stock runs out 879 kg short, about three days of production, and the choice is to air freight a top up at many times the sea rate or to stop the line.

The fix. Put the 2 week lead time deviation into the tool and sigma_LT becomes the square root of (10 x 600 squared + 2,000 squared x 2 squared) = 4,427 kg, so safety stock is 7,283 kg and the reorder point is 27,283 kg. The same 12 week slip now leaves 3,283 kg in the store when the container arrives, and the line keeps running.

Planning orders around the factory shutdown for Chinese New Year, when lead times stretch for everyone at once? The CNY shutdown planner shows the last safe order date and when production restarts.

Checking the manufacture date and remaining shelf life of the lots already in stock? The Julian date converter decodes the lot code and gives the expiry date.

Frequently asked

What is the reorder point formula?

The reorder point is the demand you expect during the lead time plus safety stock, so ROP = weekly demand x lead time in weeks + safety stock. At 2,000 kg a week and a 10 week lead time the expected demand is 20,000 kg, and the safety stock sits on top of that to cover the weeks that run long or busy.

How is safety stock calculated with a service level?

Safety stock is z times the standard deviation of demand over the lead time, where z comes from the normal distribution for the service level you want. At 95% the z value is 1.645 and at 99% it is 2.326, as tabulated in the NIST/SEMATECH e-Handbook of Statistical Methods. When lead time also varies, the tool combines both sources of variation in one standard deviation.

Why should I include lead time variation for goods from China?

Ocean lead times move with production slots, rolled sailings, port congestion and customs holds, and the formula treats a two week swing in lead time as a full two weeks of extra demand. Leaving the lead time standard deviation at zero assumes every shipment lands on the planned day, which is the assumption that runs a line dry.

What does the EOQ tell me?

The economic order quantity is the order size that balances the cost of placing orders against the cost of holding stock, using EOQ = square root of (2 x annual demand x cost per order / annual holding cost per unit). It ignores minimum order quantities, full container loads and price breaks, so round it to the nearest quantity your supplier and your container will actually take.

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Sourzi shows what official files say. It is not customs or legal advice. For a binding answer, ask a licensed customs broker, a CBP ruling or an Australian Border Force Tariff Advice.

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