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About

In supply chain management, the Reorder Level (ROL) is the specific level of stock at which a new order must be placed to ensure that fresh inventory arrives exactly when the existing stock runs out. Placing orders too early ties up cash flow in excess warehousing; placing them too late causes stockouts, lost sales, and customer dissatisfaction.

This calculator is designed for logistics managers and retailers. It goes beyond the basic formula by incorporating Safety Stock, which accounts for real-world variability—such as supplier delays or sudden spikes in customer demand. By buffering against uncertainty, you maintain a high Service Level (typically 95-99%).

supply chain safety stock logistics warehouse

Formulas

The Reorder Level determines the trigger point for restocking:

ROL = (Ddaily × Ldays) + Safety Stock

If Safety Stock is unknown, it is calculated based on Service Level (Z) and Demand Deviation (σ):

Safety Stock = Z × σLT

Reference Data

Product CategoryDemand Variability (Std Dev)Rec. Service LevelZ-Score Factor
FMCG (Groceries)High98% - 99%2.05 - 2.33
Apparel (Fashion)Very High90% - 95%1.28 - 1.65
Electronics (Flagship)Medium95%1.65
Electronics (Accessories)Low90%1.28
Pharma / MedicalLow (Critical)99.9%3.09
Auto PartsMedium95%1.65
FurnitureMedium/High85% - 90%1.04 - 1.28
Raw MaterialsLow95%1.65

Frequently Asked Questions

Lead Time Demand is the amount of stock you expect to sell while waiting for your supplier to deliver the new order. It is calculated as Average Daily Sales multiplied by the Average Lead Time in days.
Service Level represents the probability that you will NOT run out of stock. A 95% service level means you are accepting a 5% risk of a stockout. High-margin or critical items (like medicine) require higher service levels (99%), while low-margin or non-critical items might only need 90%.
No, they work together. ROL tells you *when* to order; EOQ tells you *how much* to order. You should use the ROL Calculator to set your trigger point and an EOQ calculator to determine the batch size.
If your supplier lead times are long or your demand is very volatile (high standard deviation), your required Safety Stock increases significantly, pushing up the Reorder Level. To reduce ROL, you must either negotiate faster shipping or smooth out demand variability.