A reorder point answers when to place an order. It does not, by itself, determine how much to buy or predict future demand. A simple model can still help a small shop make its assumptions visible.
1. Estimate demand during lead time
Suppose you sell an average of four items a day and the supplier needs seven days to replenish them. Expected lead-time demand is 4 × 7 = 28 units. If you choose a ten-unit safety buffer, the reorder point is 38.
Choose a buffer based on your experience of demand swings, delays, shelf life and the consequences of running out. This calculator does not derive a statistically guaranteed service level from the buffer.
2. Compare against inventory position
On-hand stock alone can be misleading when a shipment is already incoming or some units are reserved. Inventory position = on hand + on order − allocated. With 25 on hand, 10 incoming and 5 allocated, position is 30. That is below the reorder point of 38.
Allocated stock should still be included in your on-hand number. If your system already reports stock net of reservations, do not subtract the allocation again. Count incoming units only when you reasonably expect them to be usable within the planning horizon; late or uncertain stock deserves a separate review.
3. Set an order-up-to target
To cover an extra seven days after the lead time, the target is 4 × (7 + 7) + 10 = 66 units. The estimated order is ceiling(66 − 30) = 36. This model suggests an order only when position is at or below the reorder point. Supplier minimums and pack sizes may require further adjustment.
4. Keep the records honest
A stock-in record increases on-hand quantity. It does not automatically cancel an incoming order in a simple offline workspace. Reduce the on-order planning field when those ordered units arrive. Likewise, release reservations when an order is canceled or dispatched.
5. Watch the limits
At zero average demand, days of stock coverage is undefined. Seasonal products, perishables, sudden promotions and unreliable suppliers may need a different planning approach. Stock value here is quantity × your entered current unit cost, not an accounting method such as FIFO or weighted average.
Write down the period used to estimate daily demand. Review that assumption after a meaningful change in sales. A clear estimate you can revise is more useful than a precise-looking number built from stale inputs.