Reorder point calculation is one of the most important things you can automate in Excel. Get it right and you never run out of stock. Get it wrong — or don't do it at all — and you're always scrambling to place rush orders at premium prices.

The Reorder Point Formula

Reorder Point = (Average Daily Sales × Lead Time) + Safety Stock

In Excel, with your data in columns:

=( AvgDailySales * LeadTimeDays ) + SafetyStock =(C2 * D2) + E2

Understanding Each Component

Average Daily Sales

The average number of units sold per day, typically calculated over the last 30-90 days. Calculate it from your sales data:

=SUMIF(SalesDate,">="&(TODAY()-90),SalesQty) / 90

Lead Time

The number of days between placing an order and receiving it. Include supplier processing time AND shipping time. If your supplier says "5 business days," that's 7 calendar days. Add a buffer of 1-2 days for reliability.

Safety Stock

A buffer to protect against demand spikes and supplier delays. The simplest formula:

Safety Stock = (Max Daily Sales - Avg Daily Sales) × Lead Time =(F2 - C2) * D2

Building a Reorder Report for All SKUs

1

Set up your Item Master sheet

One row per SKU with columns: SKU, Item Name, Avg Daily Sales, Lead Time, Max Daily Sales, Safety Stock, Reorder Point.

2

Calculate Reorder Point for each SKU

In the Reorder Point column: =(C2*D2)+E2. Drag down for all SKUs.

3

Add a Status column

=IF(QtyOnHand=0,"Out of Stock",IF(QtyOnHand<ReorderPoint,"Reorder Now","OK"))

4

Add a Priority column

=IF(QtyOnHand=0,"🔴 URGENT",IF(QtyOnHand/ReorderPoint<0.5,"🟡 HIGH","🟢 NORMAL"))

5

Filter to see what needs ordering

Filter the Status column to show only "Reorder Now" and "Out of Stock". This is your daily purchase list.

Adjusting for Seasonal Demand

If your sales vary by season, use a seasonal average rather than a 90-day average. For a product that sells 3x more in December:

💡 Use our free Reorder Point Calculator to quickly calculate the right number for any SKU.

FAQ

Should I set the same reorder point for all sizes of the same product?
No — each SKU (size/color/variant) needs its own reorder point based on its own sales velocity and lead time. A size Small might sell 3x faster than size XL and need a much higher reorder point.
How often should I update reorder points?
Review quarterly at minimum. Update immediately if a supplier changes their lead time, or if you notice a significant shift in sales velocity. High-volume items may need monthly review.

🔁 Get the Pre-Built Reorder Report Template

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