Reorder

Granular stock reorder decisions at scale

Unlock working capital tied up in excess stock and maximize availability with reorder recommendations and SKU-level demand forecasting software

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Tackling beyond the top and bottom 20% of SKUs

You’ve got thousands of products, multiple channels along with fluctuating demand and supplier lead time. But you never have enough time to make granular reorder decisions beyond the top and bottom 20% of your range. That means the middle of your range is vulnerable when it comes to overstocking and stockouts.

Free up working capital

Reorder uses AI to give SKU-level demand forecasts across your entire range. It automates the process of analyzing your data and utilizes a sophisticated reorder point formula to recommend when and how much stock to reorder. It helps you keep your availability at that sweet spot, where you don’t miss out on sales or tie up working capital in excess inventory.

Quick strategic reordering decisions, at scale

Reorder’s SKU-level demand forecasting software cuts out the hours of staring at spreadsheets, freeing up your time to make strategic and granular reordering decisions across thousands of products.

  • Avoid stockouts and never disappoint a customer

  • Avoid overstocking, unnecessary markdowns and waste

  • Reduce warehouse and logistics costs

  • Reduce manual decision making and save time

See Peak's SKU-level demand forecasting software in action

Under the hood

Reorder’s SKU reorder solution is built on Peak’s platform. It uses SKU-level demand forecasting, inventory optimization models and reorder point formulas to calculate demand and optimal safety stock levels, to give you recommendations of when and how much of any SKU you should reorder.

See Reorder's SKU demand forecasting software in action

More from Peak

FAQs

What is a reorder point?

A reorder point is a crucial concept in inventory management, representing the inventory level at which a new order should be placed to avoid stockouts. It’s a predetermined threshold that helps businesses ensure a continuous and smooth supply chain by triggering the replenishment process at the right time.

The reorder point is calculated based on factors such as the lead time it takes to receive new inventory, the average rate of product consumption and a safety stock buffer to account for unforeseen demand fluctuations. This calculated point helps businesses maintain optimal stock levels and prevent disruptions in their operations.

Understanding and setting an appropriate reorder point is essential for businesses to strike a balance between the costs associated with holding excess inventory and the potential revenue loss due to stockouts. A well-defined reorder point ensures that inventory is replenished just in time, minimizing carrying costs while meeting customer demand effectively.

Modern inventory management systems often incorporate advanced algorithms and real-time data to calculate and adjust reorder points dynamically. This proactive approach enables businesses to adapt to changing market conditions, demand patterns and supply chain dynamics.

In conclusion, a reorder point is a strategic element in inventory management that empowers businesses to optimize their stock levels, enhance operational efficiency and deliver a seamless customer experience. Incorporating a well-calibrated reorder point into your inventory strategy can significantly contribute to overall supply chain effectiveness and business success.

What is the reorder point formula?

The reorder point formula is a vital tool in inventory management, helping businesses determine the optimal time to reorder products to maintain an uninterrupted supply chain. The formula calculates the inventory level at which a new order should be initiated to avoid stockouts during the lead time required for replenishment.

The basic reorder point formula is:

Reorder Point = Lead Time Demand + Safety Stock

Where:

  • Lead time demand: The average units sold per day multiplied by the lead time in days
  • Safety stock: An additional buffer to account for uncertainties such as unexpected demand spikes or delays in the supply chain

A more detailed version of the formula is:

Reorder Point = (Average Daily Demand × Lead Time in Days) + Safety Stock

To enhance accuracy, businesses may use statistical methods, historical sales data and forecasting tools to refine the values used in the formula.

Implementing an effective reorder point formula ensures that businesses can meet customer demand without excessive inventory carrying costs or the risk of stockouts. Modern inventory management systems often automate these calculations, providing real-time insights to optimize the reorder point dynamically based on changing market conditions and demand patterns.

In summary, the reorder point formula is a valuable asset for businesses seeking to strike a balance between maintaining sufficient stock levels and minimizing holding costs. By leveraging this formula, businesses can enhance their overall inventory management strategy and ensure a seamless supply chain process.