Business
Inventory reorder point
Estimate when to reorder from demand during lead time plus safety stock.
Calculators / Business / Inventory safety stock with uncertainty
Inventory safety stock with uncertainty calculator
Estimate a stock buffer from daily-demand and replenishment-time uncertainty.
On this page
Safety stock estimate180.2units
Mean lead-time demand500units
Reorder-point estimate680.2units
Calculator controls
How to calculate
Estimate a stock buffer from daily-demand and replenishment-time uncertainty.
Safety stock estimate =
z*sqrt(L*sd^2+d^2*sL^2) unitsMean lead-time demand =
d*L unitsReorder-point estimate =
d*L+z*sqrt(L*sd^2+d^2*sL^2) unitsWorked example
- Mean daily demand (units/day): 100
- Daily demand standard deviation: 20
- Mean lead time (days): 5
- Lead-time standard deviation (days): 1
- Service-factor z value: 1.645
- Safety stock estimate: 180.2 units
- Mean lead-time demand: 500 units
- Reorder-point estimate: 680.2 units
Assumptions and limits
Uses independent daily demand, independent lead time and a normal approximation. Demand trends, correlated delays and stockout costs are excluded; the service factor is supplied, not guaranteed.
Results are rounded for display; calculations use unrounded values. Read our calculation methodology.
Understanding the result
Estimate a stock buffer from daily-demand and replenishment-time uncertainty. Round planned stock to purchasable units after considering the estimate. A z value concerns cycle service under the model, not order fill rate.
When this tool is useful
Round planned stock to purchasable units after considering the estimate. A z value concerns cycle service under the model, not order fill rate.
Understanding your inputs
| Input | Example |
|---|---|
Mean daily demand (units/day) d | 100 |
Daily demand standard deviation sd | 20 |
Mean lead time (days) L | 5 |
Lead-time standard deviation (days) sL | 1 |
Service-factor z value z | 1.645 |
Frequently asked questions
Which assumptions matter for this result?
Uses independent daily demand, independent lead time and a normal approximation. Demand trends, correlated delays and stockout costs are excluded; the service factor is supplied, not guaranteed.
How can I check the worked example?
Use the displayed example inputs in the stated formula. Keep each quantity in its labelled unit and compare the unrounded result before applying display rounding.