Min/max is the replenishment system most small businesses actually run, even before they know its name: set a floor, set a ceiling, and reorder back up to the ceiling whenever you hit the floor. This guide covers the formulas, a worked example, and when min/max is the right call versus a reorder-point-plus-EOQ system.
By Edmund Tong, Founder of StockZip · Last updated: 2026-07-03
Min/max inventory sets two numbers per item: Min, the level that triggers a reorder, and Max, the ceiling you order back up to. When on-hand quantity drops to Min, you place an order for Max minus current on-hand — enough to refill the shelf, not a unit more or less.
Compare that to a reorder-point-only system. A reorder point tells you when to order — it is silent on how much. Most businesses that use reorder points alone answer “how much” with a fixed order quantity, a supplier case-pack size, or gut feel. Min/max removes that guesswork by defining the order-up-to quantity as part of the same policy: order quantity = Max − current on-hand, every time.
That single change — pairing a floor with a ceiling — is why min/max is popular with small teams. One pair of numbers per item, set once and revisited periodically, answers both questions a reorder needs answered.
Min level = (Average daily demand × Lead time) + Safety stock
Max level = Min + (Average daily demand × Review/order cycle)
Each input comes from data you likely already have:
Say you sell an item at an average of 15 units a day, your supplier's lead time is 5 days, and you hold a 30-unit safety stock buffer:
| Average daily demand | 15 units |
| Lead time | 5 days |
| Safety stock | 30 units |
| Min level | (15 × 5) + 30 = 105 units |
| Order/review cycle | 14 days |
| Max level | 105 + (15 × 14) = 315 units |
| Current on-hand | 90 units |
| Order quantity | 315 − 90 = 225 units |
On-hand at 90 units is already below the 105-unit Min, so a reorder fires. The order quantity is the full gap back to Max — 225 units — computed the moment the trigger fires, no separate lookup required.
Min/max and reorder-point-plus- EOQ share the same trigger math — the reorder point and the Min level are the same formula. They differ in how they answer “how much to order”:
| Aspect | Min/Max | Reorder Point + EOQ |
|---|---|---|
| Complexity | Low | Medium-high |
| Tells you | When to order + how much, in one policy | When (ROP) + how much (EOQ), calculated separately |
| Best for | Small teams, stable demand, supplier case-packs | Businesses optimizing order cost against holding cost |
| Tooling | Per-item min/max fields | Demand variance + cost data |
EOQ optimizes order size against ordering cost and holding cost — worthwhile once those costs are large enough to model precisely. Most small businesses don't have that cost data cleanly separated, and a supplier case-pack or shelf-space limit already caps the practical order size anyway. Min/max gets 80% of the benefit with a fraction of the setup.
“Round number that feels safe” is not a formula. A Max set by feel either overstocks cash into cardboard or leaves you short before the next cycle.
Min/max set once at launch and left alone drifts out of sync the moment demand or lead time moves. Review quarterly, not never.
Your top sellers and your slow movers do not deserve the same review cadence or the same buffer. ABC analysis tells you which items earn tighter, more frequent min/max tuning.
Skip the safety-stock term and Min is really just lead-time demand — no cushion for a late supplier or a busy week. Size it properly with the safety stock guide.
StockZip stores a Min and Max on every item and fires a low-stock alert the moment on-hand drops to Min — no spreadsheet to check, no manual review to remember. Set the levels once, adjust them from real usage data, and let the alerts do the watching.
Straight answers about the formulas, how min/max compares to reorder point + EOQ, and how often to update levels.
Min/max inventory is a replenishment method where you set two levels per item: a minimum that triggers a reorder, and a maximum you order back up to. When on-hand quantity drops to the min, you order enough to bring it up to the max — no separate order-quantity calculation needed.