The reorder point formula, explained with real numbers

The reorder point answers 'when do I order'; the order quantity answers 'how much'. Both reduce to one number you can compute on a napkin — and both get dressed up by software into black boxes. This page keeps the napkin: every term defined, a worked example with real numbers, and the honest list of situations where the simple formula misleads.

##The three terms

Sales velocity (units per day)

velocity = units sold in a window ÷ days in the window. The window is the only judgment call: 30 days reacts fast but wobbles on small numbers; 90 days is stable but slow to notice a trend change. Default to 30 for most catalogs, 60–90 for slow movers. Compute it from paid orders' line items — Shopify's sales data has everything needed.

Lead time (days)

Days from placing the PO to sellable stock on the shelf — order processing + production + shipping + receiving, not just transit. Measure it per supplier from your last few purchase orders (order date → received date); guessing low here is the #1 cause of stock-outs that 'the formula' gets blamed for.

Safety stock (units)

The buffer for bad weeks: demand spikes, supplier delays. The textbook version uses standard deviations; the practical version for small catalogs is extra days of cover: safety stock = velocity × buffer days, with 7–14 buffer days for steady sellers and more for volatile ones or unreliable suppliers.

##Worked example

A water bottle sold 63 units in the last 30 days → velocity 2.1/day. The supplier's measured lead time is 14 days, and you keep a 14-day buffer. Current stock: 4 units.

That last row is the number that matters on the purchase order — and it is precisely the math Solvi Restock shows on every suggestion, in words: *“sold 63 in 30 days ≈ 2.1/day; 4 in stock = 1.9 days; 14-day lead → order 55 to cover 4 weeks.”* Same formula, computed continuously, sorted by urgency.

##Where the simple formula lies

• Zero-velocity items with stock: no sales in the window makes cover infinite — new listings and seasonal returners need a manual floor, not the formula.
• Seasonality: a 30-day window before Christmas suggests a January-sized order. Widen the window or apply judgment at peak boundaries; this is where forecasting platforms genuinely earn money at scale.
• Sales spikes in the window: one viral day inflates velocity for 30 days. Check the reasoning line before sending the PO — visible math exists exactly so you can catch this.
• Case packs and MOQs: the formula outputs 55, the supplier sells boxes of 24 → you order 48 or 72. The suggestion is the starting point; the PO line is the decision.

##Set it up on your store