Your vendor takes one week to deliver each batch of perfumes you order. You keep enough excess stock for 5 days of sales, in case of unexpected delays. Now, what should your reorder point be? The order for the next batch of perfume should be placed when there are bottles left in your inventory.

Graph This simplified reorder point graph shows you the relationship between your reorder point, stock level, and safety stock over a period of time.

It helps you visualize how your reorder point is based on your sales trends. In the above graph, the maximum level is the sum of the safety stock and the order quantity, or bottles. Once the stock left in your inventory reaches the reorder level of bottles units, you should place a new purchase order with your vendor.

The minimum level, which is bottles, will help you fulfill your orders until your ordered stock reaches the warehouse. Once the new order is received in your warehouse, the stock level returns to the maximum level of bottles units. In such cases, your reorder point can be calculated by multiplying your daily average sales by your lead time.

Therefore, you should place an order for the next batch of perfumes when you have bottles left. You may purchase items in your inventory from various vendors, and different vendors have different lead times.

The two items are purchased from different vendors with different lead times. In a typical day, you sell 5 water bottles and 10 snack boxes. Since your lead time is also one day, the new stock should arrive just in time for you to continue selling without interruption. Given that your lead time is also four days, the new stock should arrive just in time for you to continue selling without interruption.

A reorder point is crucial for effective inventory management. put the torp bombers into a fleet, have the fleet set to resupply level high, have the supply ship in the fleet. have a trader in the fleet - it should then keep the supply ship topped up.

the trader should keep the supply ship topped up. ensure you have the plans for anything you wish to replenish. Problems at present are that if a resupply needs more than max stock in one go, I seem to have to manually overload the supply ship.

be careful you dont have ships with fly and wait orders, it can suppress the resupply urge. Originally posted by trooperrob :. jah View Profile View Posts.

Here I have a problem. If I click "get supplies", nothing happens. Also, traders assigned to my nomad do nothing. it should go and buy the supplies, ensure you have sats out on relevant factories.

Check the pilot skill level of your supply ship pilot, if too low, it can only find in sector. check the allowed purchase price of the resources - raise until it can find them.

check the orders tab, it should have a get supplies order listed, but will only rush off when it finds supplies to buy. I think the trader assigned will only top up the supply ship, it wont get the initial set. ensure everything is set to resupply level high. Try ordering a damaged ship to repair at the supply ship, that shouldn't require supplies.

Gregorovitch View Profile View Posts. A step that is easily missed is that you must own the blueprints for all the equipment that the supply ships is intended to manufacture. If you don't have these the thing will appear like it's just not working properly.

There is also a term Goods In Transit GIT which is subtracted from this ROL formula but its not here. how can we calculate GIT?? And once you set your reorder point, inFlow will also take the goods in transit into account when suggesting what to reorder. We have consumption data and lead time for the product.

Now we want to calculate minimum inventory level, Maximum inventory level, and Reorder level. Hi Mahesh, sorry, this article covers the reorder point level specifically. TODAY BOSS QUESTION ME HOW TO A CHECK ON REORDER LEVEL in software that we use.

Software have report Stock Less then reorder level. But Boss need that how can we check items that come near to reorder level means item reorder level is and he says that when item quantity is near to then u report me about this. how can i do this. Or the other thing you could tweak is how much you reorder at a time the reorder quantity.

Hi, great formula.. its helpful May i know how if I have different items? is there another way to count the reorder point?

Hi Christy, good question! We actually have a new report in our software, inFlow Cloud, that helps with this. It can take your sales numbers into account, as well as the lead time, and can suggest reorder points for your products.

Wow, that was a great piece of article out there for a grab. Thanks for the thorough explanation. Good article but the report used is not available on the desktop version, unless there is an update I am missing.

Hi Gabriel, sorry we missed this one. Many vendors can have a minimum order quantity MOQ , and our software, inFlow Cloud, has a spot specifically so that you can input the reorder quantities. Hi Thomas. Very nice article. But can you tell me how much should we order for the next batch when we hit the reorder point, as i get confused with other articles in the internet.

So after i get to the reorder point how much shall i order? Our software, inFlow Cloud, can help with how much you should reorder based on your sales and inventory levels. So when you hit your reorder point, you could examine the average daily sales of that product. Seams that the system uses the Vendor for lead times and not the item being ordered itself?

If I order the same item from 2 different vendors then how does that work? If I order for different locations how does that work? I have submitted your feedback to our team along with your email address, so someone from inFlow will get in touch if we have improvements to share down the line.

So once you dip below the reorder point in your case , then that is when you should order more stock. Looking for another system today, but looks like the whole world mistakenly has a knee-jerk reaction and blurts out MRP at the drop of a hat. OP works just fine. This is also to address the full needs of a small mfg company.

good article. Hi Charlie, I would recommend inFlow Cloud if you do manufacturing and you need to keep an eye on stock levels and reorder points.

Our software offers reorder points on a per-location basis, so if you have multiple offices or manufacturing sites, each of them can track stock separately while still being able to transfer stock to each other. You can see our manufacturing features here:. May I know can we use this reorder formula for ordering items for multiples shop from production for donut business.

Hi Yin Yin, yes you could. I hope you are doing well. I have a few questions related to re-order point but I have not been able to find a good answer to it. Could you please explain what are the different variables that can affect the reorder point or level from within the organization?

Or what are the factors that may hamper the warehouse or distribution center from placing a reorder or effect it in any way. Which formula of Re-order point to be used if an organisation has a policy to keep safety inventory?

Does order frequency need to be taken into account when looking safety stock settings within the re-order point formula. Sales: — Jan — Feb 80 — Mar 60 — Apr 97 — May — June Therefore: — Average 84 units per Month — Max units per Month — Lead time 14 days — Order frequency 7 days.

Do I need to add any additional safety stock based on whether my order frequency was 1 week or 4 weeks? Figuring out your reorder point is all about not having to order on a regular basis but instead ordering only when you need product.

Your safety stock will be there just in case you experience any unforeseen shipping delays. We love helping people out in anyway we can around here 😉. How can I account for demand in relatively set multiples? Can that be baked into the Safety Stock and ROP? Can I account for minimum projected demand?

In the example you gave if 2 units are used per year then your demand per year should also be 2. Your minimum stock should be set to a number that will allow you to still operate.

If you need 2 units to do maintenance then your minimum stock should be at least 2 units. Great by all means and a very informative blog. Thanks for reading! Be sure to subscribe to our content newsletter to get updates whenever we post new content.

Find the reorder point of a product if average weekly demand is 50 units, with lead time of 2 weeks, and standard deviation of demand during lead time is 10 units. thank you for the author.. Very impressive, and thanks a lot for sharing ideas regarding this articles.

Thanks so much for reading, and a double thank you for the kind words! We love helping people out whenever we can. If you want to keep up to date with all our new content you can subscribe to our newsletter at the bottom of the page.

Please consider subscribing to our newsletter at the bottom of this page to stay up to date with all our new releases. Thanks for stopping by and taking the time to read our blog! Determine the reorder point. Assume the demand is over a week day year. What quantity is the recommended order?

Need reply by 1pm, Thanks in advance, God bless! Thanks for reading. Based on the numbers you gave, if you want to have safety stock for 60 days you would need 7. This would give you 63 total units over the course of 12 months 40 to account for your forecasted and 21 for safety stock.

Hope this helps. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Submit Comment. Enter your email to get our stories delivered right to your inbox. Stories Product Updates Customer Spotlight. Inventory 87 Reorder Point Formula and Safety Stock: A Complete Guide Posted by Thomas Last Updated October 13th, Secret Life of Inventory Reorder Points and Safety Stock.

The Reorder Point Formula inFlow Inventory. Khadar on March 30, at am. Thank you It was helpful article Reply. Eshetu Tadesse on June 14, at am. Amalina on July 3, at pm. What is safety stock? Thomas Wong on July 5, at am.

Michael on July 23, at am. Thank you Reply. Thomas Wong on November 15, at am. Mohamed on August 6, at am. Many Thanks Reply. Tom on September 7, at am. Hey man, You could only have Thomas Wong on October 31, at pm. Boniface Kinyua on November 11, at am.