Key takeaways
- Start with demand during supplier lead time.
- Add safety stock for variability.
- Open-order shortages override a normal threshold.
Use demand during lead time as the baseline
A simple reorder point is the amount you expect to use while waiting for the next shipment, plus safety stock. If you normally use 12 blanks per week and delivery takes two weeks, lead-time demand is 24 blanks. Add a buffer based on the reliability of demand and the supplier.
For irregular custom work, use recent average demand as a starting point and then inspect the orders already accepted. Known shortages are more important than a historical average.
Choose safety stock intentionally
- Use a larger buffer for long or unreliable supplier lead times.
- Use a larger buffer for inexpensive materials that can stop an expensive order.
- Use a smaller buffer for costly or highly seasonal materials.
- Do not count unreceived purchase orders as on-hand stock.
Review the threshold when the business changes
Update the reorder point after a large product launch, seasonal shift, supplier change, or sustained change in order volume. A threshold set during a slow month may be dangerously low during holiday production.
Keep ordering separate from receiving
Record a supplier purchase as incoming, including the expected date and ordered quantity. Only increase on-hand inventory when the shipment is received. This keeps the production board honest while still showing that relief is on the way.
Frequently asked questions
What is the difference between a reorder point and an order quantity?
The reorder point is the on-hand level that triggers attention. The order quantity is how much you decide to buy. They solve different problems and do not need to be the same number.
Should incoming stock reduce a reorder recommendation?
It can reduce the additional amount you need to purchase, but it should remain visibly separate from on-hand stock until received. A delayed shipment should not make an order appear ready.
How this guide was created
This guide was written by the MakerBatch editorial team from the production, inventory, costing, and fulfillment workflows built for handmade and made-to-order sellers. It is educational information, not legal, tax, or financial advice. We update guides when the underlying workflow or product changes materially.