How to set reorder points that actually work
Static minimums cause stockouts and dead stock. Use sales velocity and days of cover to reorder the right quantity at the right time.
Most reorder rules are a number someone typed in once and never touched again: "reorder when we hit 10." The problem is that 10 units means very different things for a product that sells one a week versus one that sells 20 a day. Static minimums quietly cause both stockouts and dead stock.
Think in days of cover, not units
The better question isn't "how many are left?" It's "how many days will they last?" That's days of cover:
days of cover = units on hand / average units sold per day
If you sell 4 a day and hold 20, you have 5 days of cover. Whether 5 days is fine depends on one thing: how long it takes to restock.
The reorder point formula
A reorder point covers demand during your lead time plus a safety buffer:
reorder point = (average daily sales × lead time in days) + safety stock
Example: you sell 4/day, your supplier takes 7 days, and you want ~3 days of buffer:
= (4 × 7) + (4 × 3)
= 28 + 12
= 40 units
When on hand drops to 40, it's time to buy. Order enough to get back to a healthy level, often expressed as a target number of days of cover.
Why velocity has to be live
Sales velocity isn't constant. It rises before a season, falls after. A reorder point calculated from last year's average will fail you exactly when it matters. The fix is to recompute velocity from recent sales, continuously.
Let the system do the math
In Stockroom, reorder suggestions are driven by real sales velocity (average units/day from actual sale movements) and show each item's sold/day and days of cover, flagging anything with less than a week left. Because on-hand is per location, each store reorders independently, and suggestions net in incoming transfers and open purchase orders so you don't over-buy. From there you generate transfers from your warehouses first, then purchase orders per supplier for the remainder, in a click.
The result: you buy the right quantity, at the right time, for each location, without babysitting a spreadsheet or discovering a stockout from an empty shelf.