Inventory planning
How much extra stock to hold, when to reorder, and — the part most calculators skip — what each extra point of service level actually costs you to carry. Everything runs in your browser; nothing you enter leaves this page.
What service level costs to hold
annual carrying cost of safety stock, by service level
By service level
| Service level | z | Safety stock | Reorder point | Cost / yr |
|---|
Tap any in the calculator to jump to its explanation here.
What you enter
How many units you sell or use on a typical day.
Where to find it: units sold over the last 90 days, divided by 90. 1,080 units in 90 days = 12 a day.
↑ back to the calculatorHow much daily sales swing around that average. A small number means steady sales; a big one means some days you sell 2 and some days 25.
Where to find it: put daily sales in a spreadsheet column and use =STDEV(). No daily data? Start with about a third of the average for a steady product, or the full average for a lumpy one.
↑ back to the calculatorDays from placing an order to having the stock ready to sell. Count all of it: production, shipping, customs, and check-in at the warehouse.
Example: 14 days to make + 5 in transit + 2 to receive = 21.
↑ back to the calculatorHow much delivery time swings from one order to the next. Shipments that always land within a day or two of plan: small. Shipments that are sometimes a week late: large.
Where to find it: =STDEV() of the actual lead times on your last several orders.
↑ back to the calculatorHow often you are willing to run out. At 95%, about 1 in every 20 reorder cycles runs out before the next delivery arrives. Higher is safer, but each step up costs more to hold — the chart shows how much.
↑ back to the calculatorWhat one unit costs you to buy and get into your warehouse — including freight and duty. Not what you sell it for.
↑ back to the calculatorWhat it costs to keep one unit on the shelf for a year, as a percentage of what the unit cost you: storage space, cash tied up that could be used elsewhere, insurance, damage and loss.
Don't know it? 20–30% is the usual assumption.
↑ back to the calculatorThe fixed cost of placing one order, whatever its size: time to prepare it, receiving fees, per-shipment charges. High order costs push you toward fewer, bigger orders.
↑ back to the calculatorWhat you get
When stock on hand drops to this number, place the next order. It covers what you'll sell while waiting for the delivery, plus the safety stock.
↑ back to the calculatorExtra units kept on hand for the surprises — a busy week, a late shipment. You don't plan to use it; it's there so a bad week doesn't become a stockout.
One limit: for items that only sell a few times a year, this calculation tends to hold too little. Those need a different method.
↑ back to the calculatorHow many units to order each time so that the cost of ordering and the cost of storing are, together, as low as possible. EOQ stands for economic order quantity.
↑ back to the calculatorThe most stock you should have — right after a delivery arrives. It's the reorder point plus one order. If you're regularly above it, you're over-ordering.
↑ back to the calculatorWhat it costs per year just to keep the safety stock on the shelf. Think of it as the price of your chosen service level.
↑ back to the calculator