My stock has fallen below the reorder point but an order is already on its way: should I order again?
Not necessarily. The reorder point is compared with your inventory position, meaning stock on hand plus what you have ordered and not yet received, not with the shelf alone. If that total is still above the point, the order in transit has you covered, and a second order now would buy twice for the same period. The calculator does not know your stock or open orders, so this comparison is yours to make.
Why the shelf alone misleads you
The reorder point is there to say: when what you hold reaches this level, start a new order, because the wait will use up the rest. But if an order went out a few days ago, part of that wait is already covered. Look only at the shelf and you will order every time stock dips, even with the previous order about to land. Then two orders arrive close together and the warehouse fills with paid-for stock that will not sell soon.
Example: when to order and when to wait
You sell 25 units a day, the lead time is 14 days, and safety stock is 100 units. The calculator gives demand during lead time of 25 × 14 = 350 and a reorder point of 350 + 100 = 450 units. You have 300 on the shelf now, below the point.
Case one: 200 units in transit. Inventory position 300 + 200 = 500, above 450. Do not order yet.
Case two: only 100 units in transit. Inventory position 300 + 100 = 400, below 450. Time for a new order.
Case three: nothing in transit. Inventory position 300, already 150 units past the point.
In case three, the lateness itself tells you something: 150 units under the point means the safety stock started being used before you ordered. If that keeps happening, you may be checking stock too rarely, or average sales have risen and you have not updated the figure.
A practical way to track inventory position
- Work out the point once per product in the Inventory reorder-point calculator and write it next to the product in your sheet.
- Add a column for quantities ordered but not received, and update it when each order goes out and when it arrives.
- Compare the point with shelf stock plus quantities in transit, never the shelf alone.
- When you order, send a purchase order from the Purchase-order generator so you have a record of quantity and date. On arrival, check what came against the packing list, which you can prepare or review with the Packing-list generator.
When to order even with stock in transit
- When the current order is running well behind schedule, so the calculation you relied on no longer holds.
- When sales jump suddenly, making the quantity in transit smaller than the new wait needs. Recalculate with the new average.
- When you learn that part of the current order is short or damaged.
The calculator reminds you of this in its explanation of the result: place a new order when available stock, including stock ordered and not yet received, falls to the point.
Common questions
Do I enter the quantity in transit in the calculator?
There is no field for it. The calculator works out the point only; comparing it with stock and quantities in transit happens in your sheet.
The order arrived and stock is back above the point. Does the point change?
No. The point only changes if daily sales, lead time or safety stock change. Current stock plays no part in it.