Reorder Point & EOQ Planner
How much to order, when to reorder, and how much safety stock you need for the service level you want.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Item or SKU
- Top-selling SKU
- Annual demand
- 12,000
- Daily demand variability (standard deviation)
- 15
- Selling days per year
- 250
- Supplier lead time
- 14
- Cost to place one order
- 85
- Unit cost
- 22
- Annual holding cost (% of unit cost)
- 25
- Target service level
- 95
- Your current order quantity
- 3,000
Example results
Order 609 units at a time (about 19.7 orders/yr) and reorder at 765 units, including 93 units of safety stock at 95% service; saves $5,240 a year vs. your current order size.
- Economic order quantity
- 609
- Reorder point
- 765
- Safety stock
- 93
- Orders per year
- 19.7
- Days between orders
- 13 days
- Annual ordering + holding cost at EOQ
- $3,350
- Savings vs. current order quantity
- $5,240
- Average inventory value
- $8,737
What stands out
You order 4.9x the economic quantity
Ordering 3,000 units costs $8,590 a year in ordering + holding vs. $3,350 at the EOQ of 609, a $5,240 difference.
Reorder when stock hits 765 units
That covers 672 units of expected demand during the 14-day lead time plus 93 units of safety stock ($2,037 tied up).
Going to 99% service adds 38 units of safety stock
About $210 more per year in holding cost. Reserve it for items where a stockout loses the customer.
Next actions
- Set a min/max in your system for Top-selling SKU: reorder point 765, order quantity 609 (round to the nearest case or pallet).
- Ask the supplier to cut lead time from 14 days; halving it cuts safety stock by about 29%.
- Recalculate quarterly or whenever demand, lead time, or unit cost moves more than 20%.
- Apply this to your top 20% of SKUs by spend first; they usually carry most of the inventory dollars.
Model assumptions & limitations
- Classic EOQ assumes steady demand, a fixed order cost, and no quantity discounts; check price breaks before rounding up.
- Safety stock = z × daily demand std. dev. × √lead time; assumes normally distributed demand and a fixed lead time.
- z-values: 90% = 1.28, 95% = 1.65, 98% = 2.05, 99% = 2.33 (cycle service level).
- Holding cost of 25% of unit cost per year is your input; 20-30% is a commonly quoted range.