Break-even unit sales
Estimate how many units of one product must sell to cover fixed costs. Use the same accounting period for all fixed costs.
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Inventory reorder point
Find an inventory threshold for reviewing replenishment of one product. Keep stock on hand, incoming orders and backorders separate.
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Inventory level for planning replenishment
180items
The threshold tells you when to plan replenishment, not how much to order. On hand plus incoming minus backorders is inventory position, not stock available for immediate shipment.
Expected demand during lead time140 items
Safety stock you entered40 items
On hand + on order − backorders160 items
Assessment of current inventory positionAt or below the reorder point: review replenishment
Reorder point = average daily demand × lead time + safety stock you choose, rounded up to whole items. Inventory position = stock on hand + orders not yet received − backorders. At or below the reorder point, review replenishment. Use one product and the same item unit throughout. Average daily demand may be fractional; stock quantities are whole items. Safety stock is your choice, not a statistical guarantee or an automatically calculated probability of avoiding shortages. If backorders have already been deducted from on-hand stock, do not deduct them twice. Incoming stock is not necessarily available to ship now; changing lead times and urgent backorders still need separate attention. This is not an economic order quantity calculation and places no orders. Minimum orders, full cartons, seasonality, shelf life and supplier delays are excluded.
Method and scope
Reorder point is average daily demand times lead days plus safety stock, rounded up to a whole item. Inventory position equals on-hand stock plus incoming stock minus backorders; a position at or below the threshold prompts a replenishment review.
The threshold answers when to review ordering, not how many items to buy. Incoming stock is not immediately available for shipment.
Use one product and the same item unit; daily average demand may be fractional but stock quantities are integers. Safety stock is your choice, not a service-level guarantee; do not deduct backorders twice, and separately assess seasonal demand, expiry, case sizes and delays.
References:Shopify: reorder point and safety stock formulas、University of Iowa: inventory position, incoming stock and backorder definitions
What this helps you do
Find an inventory threshold for reviewing replenishment of one product. Keep stock on hand, incoming orders and backorders separate.
What to enter
Start with average daily demand (items), then fill the other relevant fields in the units shown. The field hints explain the required format and examples.
How the calculation works
Reorder point is average daily demand times lead days plus safety stock, rounded up to a whole item. Inventory position equals on-hand stock plus incoming stock minus backorders; a position at or below the threshold prompts a replenishment review.
Worked example
At 8 items daily, five days lead time and 10 safety items, the reorder point is 50. With 30 on hand, 15 incoming and 5 backorders, inventory position is 40.
Understanding the answer
The threshold answers when to review ordering, not how many items to buy. Incoming stock is not immediately available for shipment.
Scope and limitations
Use one product and the same item unit; daily average demand may be fractional but stock quantities are integers. Safety stock is your choice, not a service-level guarantee; do not deduct backorders twice, and separately assess seasonal demand, expiry, case sizes and delays.