When should I place the next stock order?
When days of cover drops to your lead time plus a safety margin — not when stock looks low. If the normal route takes 42 days and you hold 60 days of cover, your decision window is 18 days, not 60. Two details change the answer: units already in transit must be counted so you do not order twice, and the timing should follow your primary route, because planning against the fast expensive route means you always still have time.
The number that misleads
“60 days of stock” sounds comfortable. With a 42-day route it means you have 18 days to decide, place the order and have it accepted. Read as 60, it becomes a stockout.
What goes into the calculation
| Input | Note |
|---|---|
| Sellable units | Excludes stranded and unfulfillable |
| In-transit units | Counted, but not as available |
| Daily sales rate | The product’s own, not an average |
| Lead time | Primary route, not the fast one |
| Safety margin | For demand variability and customs delays |
Define legs, not routes
Defining every route by hand multiplies fast: three origins and four destinations is twelve routes, each with an air and a sea variant. Defining the legs — “warehouse → port, 3 days”, “port → FBA UK, 35 days by sea” — lets the routes be derived, including multi-step ones through a transit hub.
Checklist
- Is the reorder point based on lead time, not a stock threshold?
- Are in-transit units counted in cover but not as available?
- Does timing follow the primary route rather than the fastest?
- Is the safety margin explicit rather than a feeling?
Frequently asked questions
How do I calculate a reorder point?
Days of cover minus the lead time of your primary route, with a safety margin for demand variability.
Should units in transit count?
Yes. Ignoring them causes duplicate orders; counting them as if they had arrived causes stockouts. They are their own state.
Which route should the timing follow?
The primary one you normally use. Planning against air freight means the system always says there is time, right up until there is not.