The sum
Reorder point = average daily sales × lead time in days + safety stock. Lead time is how long a supplier takes from order to delivery. Safety stock covers the days when sales run hot or a delivery runs late.
| Value | |
|---|---|
| Sold in the last 90 days | 212 |
| Average daily sales (212 ÷ 90) | about 2.4 |
| Supplier lead time | 7 days |
| Demand during lead time (2.4 × 7) | about 17 |
| Safety stock (a few days' extra) | 7 |
| Reorder point | 24 |
When stock falls to 24, it's time to order. If you'd like to hold at most 70 cups, order enough to bring stock back to that maximum: with 22 on the shelf, order 48.
Why use the last 90 days
Three months of sales smooths out one-off busy days without reaching back to a different season. For very seasonal products, compare the same months last year as well.
Minimums and maximums
- A minimum stops the shelf looking empty, even for slow sellers: a display needs a few items.
- A maximum stops overbuying: shelf space and cash are both limited.
- Pack sizes matter: if the supplier sells in cartons of 24, round up to a carton.
Review regularly
- Recalculate reorder points monthly from recent sales.
- Check lead times with suppliers when deliveries slip.
- Watch lost sales: products customers asked for that you didn't have.
- Adjust ahead of known peaks such as Ramadan, back to school or the cooler months.