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Inventory Reorder Point & EOQ Calculator

Optimize inventory levels with reorder points, safety stock, and Economic Order Quantity analysis.

Demand & Lead Time
units
days
days
$
Cost Parameters
$
$
units/yr
Presets:
Reorder Point
500
units — order when stock hits this level
Safety Stock 150
EOQ 552
Orders / Year 33.1
Avg Inventory 426
Annual Cost Breakdown
Ordering Cost $826
Holding Cost $828
Total Inventory Cost $1,654
ROP = (50 × 7) + 150 = 500 EOQ = √(2 × 18250 × 25 / 3) = 552

How to Use This Calculator

1

Enter Demand Data

Input your average daily demand in units and your supplier lead time in days. Annual demand auto-calculates from daily demand.

2

Set Safety Buffer

Choose safety stock days to protect against demand spikes or delivery delays. More buffer days means more protection but higher carrying cost.

3

Add Cost Parameters

Enter your order cost (shipping, admin per order) and holding cost (storage, insurance per unit per year) to calculate Economic Order Quantity.

4

Review & Optimize

Check the EOQ Analysis tab for sensitivity insights and the Cost Chart to visualize the optimal order quantity where total cost is minimized.

Frequently Asked Questions

What is a reorder point and why does it matter?

The reorder point (ROP) is the inventory level that triggers a new purchase order. It accounts for lead time demand and safety stock to prevent stockouts. Without a proper ROP, you risk either running out of stock (lost sales) or over-ordering (excess carrying costs).

How does Economic Order Quantity (EOQ) save money?

EOQ finds the sweet spot between ordering too frequently (high ordering costs) and ordering too much at once (high holding costs). By ordering the EOQ amount each time, you minimize the combined annual cost of placing orders and storing inventory.

What should I include in ordering cost?

Order cost includes everything incurred per order: purchase order processing, shipping and freight charges, receiving and inspection labor, and any supplier setup fees. It does not include the cost of the goods themselves.

What goes into holding cost per unit?

Holding cost covers warehouse rent allocated per unit, insurance, obsolescence risk, capital opportunity cost, utilities, and handling. A common rule of thumb is 20-30% of the unit cost per year, but actual costs vary by industry.

How many safety stock days should I use?

It depends on demand variability and supplier reliability. Stable demand with reliable suppliers may need only 1-2 days. Volatile demand or unreliable supply chains may need 5-10 days or more. Start with 3 days and adjust based on your stockout history.

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