What is Reorder cycle?

A short reorder cycle means you place small orders often, which keeps cash tied up in stock lower but adds more work and more freight. A long reorder cycle means fewer orders but you need more buffer stock to cover the extra time between deliveries.

Look at your reorder cycle per supplier, not per store. A local candle supplier might support a two week cycle, while an overseas apparel supplier might force a twelve week cycle. Set your safety stock and reorder point based on the actual cycle length for each one.

Formula

Example

A candle store orders jar candles from the same supplier on January 1, February 1 and March 5. The first reorder cycle is 31 days, the second is 32 days. The owner uses roughly 31 days as the planning cycle for that supplier.

Common mistakes

• Using one reorder cycle length for every supplier instead of tracking it per supplier.
• Ignoring that the reorder cycle changes when a supplier's lead time or minimum order quantity changes.
• Confusing reorder cycle with lead time, when lead time is only the wait after placing the order, not the gap between orders.

Reorder cycle and SteadyShelf

SteadyShelf tracks each supplier's lead time and your sales pace to suggest an order-by date, which keeps the reorder cycle consistent without you tracking it by hand.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Lead time · Reorder point · Order cycle · Periodic review · Safety stock

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