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How to calculate a reorder point in Excel and Google Sheets
Excel & Google Sheets
=B2*C2+D2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Item | Daily Usage | Lead Time | Safety Stock | Reorder Point |
| Item A | 10 | 7 | 20 | |
| Item B | 5 | 14 | 15 | |
| Item C | 25 | 3 | 30 | |
| Item D | 8 | 10 | 10 |
=B2*C2+D2→90
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Step by step
- 1Set up columns: Item, Avg Daily Usage (B), Lead Time in Days (C), Safety Stock (D), Reorder Point (E).
- 2In E2, enter =B2*C2+D2. This multiplies daily usage by lead time then adds safety stock.
- 3Copy the formula for all items.
- 4Compare the Reorder Point against Current Stock to decide when to order.
Tips
- Calculate safety stock as Z * standard deviation of demand * sqrt(lead time). For a simpler approach, use a fixed buffer like 20% of average usage * lead time.
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Frequently asked
What is safety stock and why is it included?
Safety stock is a buffer that covers unexpected demand spikes or delivery delays. Without it, the reorder point only accounts for average usage.
How do I calculate average daily usage from monthly data?
Divide monthly sales by the number of days in the month: =MonthlySales/30.