How to Set Reorder Points Without Guesswork
Use recent demand, supplier lead time, and a small buffer to decide when to reorder each product.
By ElectroX Team
A low stock alert is useful only when its threshold reflects how quickly an item sells and how long a replacement takes to arrive. The same minimum quantity for every product will leave some shelves empty and others overfilled.
Estimate demand during lead time
Take the average units sold per day and multiply it by the number of days your supplier usually needs. If a cable sells two units a day and delivery takes seven days, you need roughly fourteen units to cover normal demand during that wait. Use several weeks of sales, and account for obvious one off promotions.
Add a sensible buffer
Add a few units when demand or delivery time varies. Keep the buffer smaller for costly, slow moving products. Review the threshold after a stockout or a long period of unsold stock; both are signals that the assumption needs work.
Make the alert actionable
Give one person ownership of the reorder list and a regular time to review it. In ElectroX, product records include a minimum stock alert, while sales and stock records provide context for changing it. The aim is a purchasing decision someone can explain.