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I get an error that my maximum daily demand is below the average and no safety stock is calculated: what did I enter wrong?

You entered a highest daily demand lower than the average daily demand, which is a contradiction: the top value in a set cannot be below its own average. If the calculator went ahead anyway, the safety stock would come out negative, so it refuses and puts the message under the field. The fix is to make sure both figures are for the same product, in the same unit and from the same period.

Published · 3 min read

What you see, exactly

You entered average daily demand of 20 units and a lead time of 10 days, chose 'Derive from maximums', then typed a highest daily demand of 15 and a longest lead time of 12. Under the highest daily demand field: 'The highest daily demand cannot be lower than the average (20).' And in place of the result: 'Correct the highlighted field to see the result.'

The same goes for lead time: type a longest lead time shorter than the usual lead time and a similar message appears under the longest lead time field.

Four usual causes

  • Swapped fields: the maximum went into the average field and the average into the maximum. This is the most common, especially on a phone.
  • A different unit: the average is per day, while the maximum came from a weekly report divided differently, or the other way round.
  • A different period: the average is from a busy season and the maximum from quiet months. The top day of a quiet month really can be below a busy season's average.
  • An average inflated by a promotion: big sale days pushed the average up, then the maximum was taken from ordinary days only.

The fix, in numbers

In the example above, you check the report and find you swapped the fields: your real average is 15 units a day and your busiest day was 20. The usual lead time is 10 days and the longest 12.

Worked example

Highest usage: 20 × 12 = 240 units.

Normal usage: 15 × 10 = 150 units.

Derived safety stock: 240 − 150 = 90 units, and the reorder point 150 + 90 = 240 units.

Checks before you re-enter

  1. Pick one period, such as the last three months, and take both the average and the maximum from it.
  2. Make sure both figures are for the same product, not two similar products or two sizes of one.
  3. Make sure both use the same unit: units per day, not cartons one day and pieces the next.
  4. Enter them again in the Inventory reorder-point calculator. The message disappears and the derived safety stock and reorder point appear.

Why doesn't the calculator fix the figure itself or just use zero safety stock? Because it cannot tell which field is wrong, and any guess could give you a plausible-looking reorder point built on a mistake. A clear refusal is safer. Once you have the right point, send your order with the Purchase-order generator.

Common questions

Can the maximum equal the average?

Yes, and the calculator accepts it. If sales and lead time are perfectly steady, the derived safety stock is simply zero.

I do not know my highest daily sales. What should I do?

Use 'Enter it myself' and type a safety stock based on your experience, rather than inventing a maximum.