How to Set Reorder Points and Low Stock Alerts
A reorder point tells you when to buy more before stock runs out. A low-stock alert turns that threshold into a visible action for your team.
The basic reorder point formula
Reorder point = average daily usage x supplier lead time + safety stock. This gives you a threshold that reflects how quickly you use an item and how long it takes to restock.
Estimate average daily usage
Use recent consumption or sales history. If demand is seasonal, calculate separate averages for busy and slow periods.
Add supplier lead time
Lead time is the number of days between placing an order and receiving usable stock. Use realistic lead time, not the supplier quote on a perfect day.
Set low-stock alerts
Once the reorder point is known, create an alert at that quantity. Review alerts weekly so thresholds stay aligned with actual demand.