Estimate when to reorder and how much to buy before stock risk turns into lost revenue or excess inventory.
Use when
- You need a practical reorder point for a SKU
- Demand is growing, volatile, or seasonal
- Lead time is long or unreliable
- You want to reduce stockouts without overbuying cash-intensive inventory
Do not use when
- You need a full supply-chain planning system or ERP implementation
- Historical demand is too weak to support even rough assumptions
- Supplier constraints are unknown and nobody can estimate them
- The task is warehouse slotting or operations design rather than reorder planning
- current on-hand inventory
- average daily or weekly demand
- demand variability if known
- supplier lead time and lead-time variability
- safety stock target or service-level preference
- MOQ, carton multiple, or purchase constraints