This page explains the reorder point: the specific quantity of remaining stock at which a replenishment order must be placed, calculated from a style's own weekly sales rate and its own lead time. It is for a factory-side merchandiser or planner, such as one working with Delta Garments, once a style has already been confirmed as a replenishment candidate.
At work, once a style is confirmed as sellable and worth reordering, the next question is exactly when to place that reorder, not simply that a reorder will eventually be needed. Waiting until stock actually runs out before ordering more guarantees a stockout, since the replenishment order still takes its own lead time to arrive. Ordering far too early ties up money in stock that is not yet needed. This lesson gives you the method for calculating the reorder point: the stock level that, once reached, triggers the order at exactly the right time.
You need: lesson 2.1's replenishment-candidate check is useful background but not required.
By the end of this lesson you can:
Not covered here: confirming a style is a replenishment candidate in the first place (lesson 2.1); calculating how much to order once the reorder point is reached (lesson 2.3).
| Term | Meaning |
|---|---|
| Weekly sales rate | The average number of pieces of a style sold in one week, found by dividing total pieces sold by the number of weeks elapsed. |
| Lead time | The total time from a confirmed order to the goods reaching their destination. |
| Reorder point | The quantity of stock remaining at which a Make to Stock buyer places its next production order against the standing forecast. |
| Safety stock | An extra quantity of material planned on top of the bare requirement, to cover ordinary variation in a supplier's own delivery or a mill's own production run without stopping the cutting room. |
| Closing stock | The stock a retailer holds at the very end of a given week, after that week's own intake and sales are counted. |
| Stock cover | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
The reorder point is not a guess; it is calculated. It equals the style's own weekly sales rate multiplied by the number of weeks its lead time takes, plus a safety stock allowance for ordinary variation in sales or delivery. Once remaining stock falls to this exact level, the reorder must be placed immediately, because the lead time is exactly how long the next order will take to arrive, and stock will keep selling during that whole wait. A reorder point calculated correctly gives a merchandiser one single number to watch on a stock report, rather than a judgement call repeated every week about whether stock still looks sufficient.
| What can differ | The shapes you will meet | Why it matters |
|---|---|---|
| Export, Make to Order factory | Delta Garments' own lead time for Order A's T-shirt reorder is 6 weeks, since fabric, cutting and sewing all restart for the new run. | A longer lead time means the reorder point is reached earlier, while more stock still remains, than a shorter lead time would allow. |
| Domestic, Make to Stock | Cedar & Co. often holds a shorter lead time on repeat styles it plans for continuously, so its reorder point sits closer to running out. | A Make to Stock buyer's shorter, planned-for lead time lets it safely carry a lower reorder point than an export Make to Order style. |
| A style with a steady sales rate | Order A's T-shirt sells at a dependable, roughly constant weekly rate once past its early launch weeks. | A steady rate makes the reorder point calculation reliable, since expected sales across the lead time are unlikely to swing sharply. |
| A style with a volatile sales rate | A style whose weekly sales swing widely week to week, driven by promotions or weather. | A volatile rate needs a larger safety stock allowance, since the plain average weekly rate alone understates the real risk of running out. |
Northline Apparel's Order A T-shirt has been confirmed as a replenishment candidate. Delta Garments, the factory, sets the reorder point: the exact stock level at which Northline Apparel must place its next order so that Delta Garments' own 6-week production lead time does not leave shops without stock.
| Question | Waiting until stock actually reaches zero | Using a calculated reorder point |
|---|---|---|
| When is the next order placed? | Only once shelves are already empty | While enough stock remains to cover the whole 6-week lead time |
| What happens during the 6-week wait? | Shops run out immediately, since no stock was held back for the wait | Remaining stock, sized to the lead time, covers ordinary sales during the wait |
| What if sales vary week to week? | No allowance exists either way | The safety stock allowance absorbs ordinary variation without a stockout |
Delta Garments calculates the reorder point from the style's own confirmed weekly sales rate.
A common mistake is treating the lead time itself, in weeks, as if it were the reorder point, without multiplying it by how many pieces actually sell each of those weeks. If Delta Garments had set Order A's reorder point at a flat, round number unrelated to its real 400-piece weekly rate, a fast-selling week could push stock below the true point needed to cover the 6-week wait, well before the flat number was reached, resulting in a stockout the calculation was meant to prevent.
A reorder point is the exact amount of stock that must remain when the next order is placed, not a guess and not simply "when it runs low." It is calculated by multiplying a style's own real weekly sales rate by how many weeks its lead time takes, then adding a safety stock allowance for ordinary variation in sales. Once stock reaches this calculated level, the order must go in immediately, because the lead time is exactly how long the wait for new stock will be, and sales keep happening during that wait. Using the lead time alone, without the style's own real sales rate, produces a reorder point disconnected from how fast the style is actually selling.
Delta Garments tracks Northline Apparel's remaining stock of Order A's T-shirt on its own replenishment worksheet.
Should Delta Garments alert Northline Apparel to place the reorder now, at 2,800 pieces, or wait until stock reaches the calculated 2,760-piece reorder point? Decide before you open the answer.
Alert Northline Apparel now, at 2,800 pieces. Waiting the extra sales needed to reach exactly 2,760 pieces risks losing the one open sewing slot next week, and the small gap between 2,800 and 2,760 pieces is well within the reorder point's own safety stock allowance.
First, why a small early alert is not the same mistake as the lead-time-alone trap. The reorder point calculation itself is unchanged; Delta Garments is using its own genuine capacity information, the one open slot, to place the order slightly ahead of the exact trigger, not replacing the calculation with a guess.
Second, why losing the open slot would cost more than ordering a few days early. If the slot is lost, the next available slot could push the real lead time beyond 6 weeks, eroding the very safety stock allowance the reorder point was built to protect.
Delta Garments should alert Northline Apparel now to secure the open sewing slot, since remaining stock is already within the reorder point's own safety allowance. Lesson 2.3 covers exactly how much that next order should be.
Framed in lost sales rather than a single penalty figure: the gap between a late order and a correctly timed one converts directly into stockout weeks.
Ordering only once stock reaches zero, instead of at the calculated 2,760-piece reorder point, creates roughly 3 weeks of stockout once the safety stock is exhausted, worth approximately USD 9,600 in lost wholesale sales for this style alone.
The workbook's "Reorder point" sheet takes a style's own weekly sales rate and lead time, calculates expected sales across the lead time, adds a safety stock percentage, and flags the exact reorder point.
Delta Garments' own row records Order A's T-shirt at a 400-piece weekly rate, a 6-week lead time, and a 15% safety stock allowance, with the sheet calculating the 2,760-piece reorder point automatically.
1. What two figures are multiplied together to calculate the expected sales a reorder point must cover, before the safety stock allowance is added?
2. A style sells at 250 pieces per week with an 8-week lead time and a 20% safety stock allowance. What is its reorder point?
3. Why must the reorder point trigger an order before stock actually reaches zero?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Weekly sales rate | معدل المبيعات الأسبوعي | Taux de vente hebdomadaire | Haftalık satış oranı | The average number of pieces of a style sold in one week, found by dividing total pieces sold by the number of weeks elapsed. |
| Lead time | الوقت الإجمالي للتنفيذ | Délai de production | Teslim süresi | The total time from a confirmed order to the goods reaching their destination. |
| Reorder point | نقطة إعادة الطلب | Point de recommande | Yeniden sipariş noktası | The quantity of stock remaining at which a Make to Stock buyer places its next production order against the standing forecast. |
| Safety stock | مخزون الأمان | Stock de sécurité | Emniyet stoğu | An extra quantity of material planned on top of the bare requirement, to cover ordinary variation in a supplier's own delivery or a mill's own production run without stopping the cutting room. |
| Closing stock | المخزون الختامي | Stock de clôture | Kapanış stoku | The stock a retailer holds at the very end of a given week, after that week's own intake and sales are counted. |
| Stock cover | تغطية المخزون | Couverture de stock | Stok kapsama süresi | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
You now know how to set the reorder point that triggers a replenishment order. The next lesson calculates exactly how much to order once that trigger is reached. Back to the course map