Inventory Rebalancing Tool Calculator

• Cycle days: Cycle = LeadTime + ReviewPeriod.
• Safety stock (service level): SS = Z × (CV × AvgDailyDemand) × √LeadTime.
• Safety stock (days): SS = AvgDailyDemand × SafetyDays.
• Reorder point: ROP = AvgDailyDemand × LeadTime + SS.
• Base stock: Base = AvgDailyDemand × Cycle + SS.
• Transfers: Surplus covers deficits, rounded to pack size and respecting minimum transfer.

1. Set lead time and review period to match ordering cadence.
2. Choose a safety method and tune service level or safety days.
3. Name your three locations, then add SKU rows to evaluate.
4. Enter stock, demand, and optional promo uplift and capacity caps.
5. Click Calculate and review targets, transfers, cover, and reorder flags.
6. Export CSV or PDF to share results with your team.

Demand-weighted target stock

Rebalancing starts by converting each location forecast into a base target. The tool uses daily demand, lead time, and review days to build an order-up-to level, then allocates the network total on-hand stock to those targets. Locations with higher velocity receive a larger share, which improves fill rate and stabilizes days of cover. When total stock is short, targets scale down proportionally so the plan remains feasible.

Safety stock tied to service level

To reduce stockout risk, safety stock is added on top of cycle demand. With the service-level method, Z is derived from the selected probability of not stocking out during lead time. Demand variability is represented by CV%, where higher CV increases buffer needs. For simpler policies, the days-of-demand option multiplies forecast by safety days. Use 90–98% service levels for most SKUs, and reserve higher values for critical items.

Transfer economics and constraints

Transfers are recommended only when one node has surplus versus target and another has deficit. Quantities are rounded to the chosen pack size, and the minimum transfer threshold prevents costly micro-moves. Estimated transfer cost is calculated as qty × transfer cost per unit, making it easy to compare against stockout losses or expedited shipping. If you see frequent small deficits, increase review frequency or raise safety stock rather than moving inventory daily.

Capacity caps and overflow signals

Capacity caps model real shelving, bin, or marketplace limits. When a cap restricts a location, the tool redistributes remaining units to other nodes, then reports overflow units that cannot be placed within caps. Overflow is a practical alert: it may indicate over-buying, slow demand, or poor assortment placement. Combine overflow with days of cover to decide whether to discount, bundle, or redirect replenishment away from constrained locations.

Review cadence and KPI governance

Operationally, run rebalancing on a fixed cadence—weekly for steady categories and daily for fast movers. Track KPIs such as units moved, transfer cost, post-transfer cover days, and reorder flags versus actual stockouts. A consistent cadence also improves forecast feedback, because transfers will no longer mask true demand. Export CSV or PDF to share plans with buyers, fulfillment teams, and finance for budget alignment.

1) What does the target service level change?

It changes Z and therefore safety stock. Higher service levels raise buffers, increase targets, and reduce reorder risk, but can raise carrying cost and reduce transfer availability for other locations.

2) How should I choose the CV% value?

Use recent daily demand history: CV equals standard deviation divided by mean. Start with 20–40% for stable items and 50–120% for volatile items, then refine as forecast accuracy improves.

3) Why do I see overflow units in the results?

Overflow appears when capacity caps prevent targets from absorbing all on-hand stock. It signals overstock, slow demand, or constrained shelving. Consider redistributing to other nodes, pausing replenishment, or promoting the item.

4) What is the purpose of pack size and minimum transfer?

They keep moves realistic. Pack size rounds quantities to handling units, while minimum transfer avoids uneconomical micro-moves. If transfers look too small, raise either value to reduce operational noise.

5) When does a location get a reorder flag?

A reorder flag appears when post-transfer stock is below the reorder point (ROP). That means projected demand during lead time plus safety stock may not be covered without replenishment.

6) Can I use this for more than three locations?

Yes. This file is structured for three nodes, but you can extend the SKU table, base calculations, and target allocation arrays to match your network. Keep the same logic for safety stock and transfers.