What is Reorder quantity?

Getting reorder quantity right keeps you from running out of stock between supplier orders and from tying up cash in excess stock. Order too little and you hit a stockout before the next shipment arrives. Order too much and the extra stock sits on the shelf costing you money in storage and tied-up cash.

Use it alongside your reorder point. The reorder point tells you when to place an order. The reorder quantity tells you how much to put on that order. Review both whenever your sales pace changes, like during a seasonal push, so the numbers still match actual demand.

Formula

Example

A candle store sells 10 units a day of a jar candle. Lead time is 7 days, so lead time demand is 70 units. Safety stock is 20 units. Target stock level is 90 units. Current stock is 25 units, so the reorder quantity is 65 units. If the supplier sells in case packs of 24, the store rounds up to 72 units.

Common mistakes

• Ordering a flat number every time instead of recalculating based on current stock and demand.
• Ignoring case pack size and ordering an amount the supplier cannot actually fulfill as ordered.
• Forgetting to subtract incoming inventory already on order, which leads to over-ordering.

Reorder quantity and SteadyShelf

SteadyShelf calculates a suggested reorder quantity per SKU from your forecast and lead time, then rounds it to the supplier's case pack before drafting the purchase order.

Work it out for your own products with our free tool: How much inventory to order.

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

Related terms

Reorder point · Case pack · Lead time demand · Safety stock · Minimum order quantity

Full inventory glossary

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