Calculator Inputs
Example Data Table
| Avg Demand | Max Demand | Avg Lead Time | Service Level | Seasonality | Adjusted LTD | Safety Stock | Reorder Point |
|---|---|---|---|---|---|---|---|
| 120 | 180 | 14 days | 95% | 1.10 | 1,995.84 | 1,001.50 | 2,997.34 |
This example uses growth, variability, backorders, and inbound stock to produce a more realistic reorder recommendation for online inventory planning.
Formula Used
1. Basic Lead Time Demand
Basic Lead Time Demand = Average Daily Demand × Average Lead Time
2. Adjusted Daily Demand
Adjusted Daily Demand = Average Daily Demand × Seasonality Factor × (1 + Growth Rate ÷ 100)
3. Adjusted Lead Time Demand
Adjusted Lead Time Demand = Adjusted Daily Demand × Average Lead Time
4. Lead Time Demand Variability
Sigma(LTD) = √[(Average Lead Time × Demand Std. Dev.2) + (Adjusted Daily Demand2 × Lead Time Std. Dev.2)]
5. Service Safety Stock
Service Safety Stock = Z-Score × Sigma(LTD)
6. Time Safety Stock
Time Safety Stock = Extra Safety Days × Adjusted Daily Demand
7. Total Safety Stock
Total Safety Stock = Service Safety Stock + Time Safety Stock
8. Reorder Point
Reorder Point = Adjusted Lead Time Demand + Total Safety Stock
9. Inventory Position
Inventory Position = Current On-Hand + On-Order Units − Backorder Units
10. Recommended Order Quantity
Recommended Order Quantity = [Adjusted Daily Demand × (Average Lead Time + Order Cycle Days)] + Total Safety Stock − Inventory Position
How to Use This Calculator
Enter your normal daily unit sales in Average Daily Demand and your peak day estimate in Maximum Daily Demand.
Add supplier timing inputs, including average lead time, worst lead time, and lead time variability in days.
Set the desired service level to match your stockout tolerance. Higher values increase safety stock.
Use the seasonality factor and growth rate to reflect promotions, peak periods, or general sales growth.
Include current on-hand stock, inbound stock, and backorders so the reorder signal uses inventory position rather than shelf stock alone.
Submit the form. The calculator places the result panel above the form, shows the reorder point, recommended quantity, shortage risk, and a Plotly graph.
Use the export buttons to download the result set as CSV or PDF for purchasing reviews, supplier meetings, or inventory documentation.
FAQs
1. What does lead time demand mean?
It estimates how many units sell while you wait for replenishment. Sellers use it to decide how much inventory should cover the waiting period before new stock arrives.
2. Why include variability in the calculation?
Average sales alone hides spikes and supplier delays. Variability helps safety stock reflect real uncertainty, lowering stockout risk when demand or lead times swing unexpectedly.
3. What is service level?
Service level is the target probability of not running out during lead time. Higher levels increase safety stock, reorder points, and inventory carrying cost.
4. Why use a seasonality factor?
It scales daily demand for temporary peaks or slower periods. Enter 1.20 for a 20% lift or 0.90 for softer demand.
5. What does recommended order quantity show?
It estimates units needed for lead time, review period, and safety stock after considering inventory position, open purchase orders, and backorders.
6. Should current on-hand equal inventory position?
No. Inventory position also includes incoming units and subtracts backorders. It gives a better reorder signal than shelf stock alone.
7. Can ecommerce sellers use this for marketplaces?
Yes. It works for direct stores, marketplaces, and multichannel operations when inputs reflect true combined demand, supplier timing, and existing inbound inventory.
8. How often should I review inputs?
Review after supplier changes, promotions, new product launches, or large demand shifts. Many sellers update weekly and before peak seasons.