My supplier delivers the same day, so why is my reorder point exactly equal to my safety stock?

What the calculator shows, exactly

You sell 15 units a day of a product from a wholesaler in your city, keep 30 units of safety stock, and entered a lead time of zero.

The maths is right. But it is only right if the goods really do arrive the instant you order, ready to sell straight away.

Is it really zero?

In practice, same-day delivery rarely means zero in the sense the calculator means. Picture these cases:

• You notice stock is low in the evening and send the order; it arrives the next morning. Orders keep coming in overnight and through the morning.
• The supplier delivers the same day only if you order before noon, otherwise the next day.
• Goods arrive at midday, but checking, pricing and entering them into your system takes hours before customers can see them.
• In the last week of the month or before occasions, the supplier itself runs late because everyone is ordering more.

In each of these, one day is more honest than zero. Enter one day now: demand during lead time 15 × 1 = 15, reorder point 15 + 30 = 45 units. One day added a full day of sales to the point, half the safety stock in this example. Stay at zero and you would order at 30 and sell 15 of them before the goods arrive, so an ordinary wait eats half your buffer before anything unexpected even happens.

The steps

1. Count lead time from the moment you decide to order until the goods are on sale, not from when they leave the supplier's warehouse.
2. If it is less than a day but not instant, enter a fraction such as 0.5; the calculator accepts decimals.
3. Enter the figures in the Inventory reorder-point calculator and check that the zero lead time note only appears if supply truly is instant.

Do you need safety stock at all with a nearby supplier?

Usually yes, even if small. A nearby supplier shortens the wait but does not rule out the product being out of stock at their end, or a day when your sales double. Enter zero safety stock with zero lead time and the point shows zero, with a note that you would reorder only after running out completely, with no buffer. When you reach the point, send the order as a clear purchase order from the Purchase-order generator, and keep an eye on what frequent small orders cost you in the Expense summary generator, because ordering often in small amounts has its own cost.