Inventory Cover & Reorder Timing Calculator

How the inventory cover & reorder timing calculator works

Inventory position is usable on-hand stock plus all units already on order. Reorder point = ceil(average daily demand × lead days + safety stock). The timing message is triggered when inventory position is at or below that whole-unit point. On-hand days of cover uses only stock currently available, divided by daily demand; it is unavailable at zero demand.

The target stock position is ceil(daily demand × target days + safety stock). Target days must be at least lead days. Subtract inventory position to find the shortfall. When it is positive, raise it to the minimum order quantity, divide by pack size, round up and multiply by pack size. With no shortfall, the target-fill order is zero even if a supplier minimum exists.

A target-fill quantity can exist before the reorder point is reached. The two results answer different questions: whether the timing threshold has been reached, and how much stock would fill the entered target today. The on-hand surplus after lead-time demand provides an additional view that does not assume already-ordered units are currently available.

The model assumes constant demand and timely receipt of every entered on-order unit. It does not subtract backorders or reservations, schedule receipts, assess storage capacity, calculate economic order quantity or promise a service level. The demand scenarios change only the daily average. Review seasonality, supplier delays and stock quality separately.

Worked example

With 500 units on hand, none on order, demand of 40 units per day, seven lead days and 100 safety-stock units, the reorder point is 380 and on-hand cover is 12.5 days. A 20-day target requires 900 units. The 400-unit shortfall is already a multiple of the 50-unit pack, so the target-fill order is 400. The 500-unit inventory position is still above the 380-unit reorder point.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Oracle NetSuite: reorder point and preferred stock formulas