Free tool · Stock planning
Reorder Level Calculator
Work out when to reorder and how much stock to hold: reorder, minimum, maximum, average and danger levels
- Free
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- Indian rules
Consumption
· units per dayLead time
· order placed to goods receivedOrdering
Good to know
- Reorder level tells you when to order. It covers the worst case: the fastest use over the longest wait.
- Minimum level is the stock you should never go below. ICAI also writes reorder level as minimum level + normal lead-time usage, so the minimum level works as your safety stock.
- Maximum level is the most you should hold. Stock above it ties up cash and space.
- Danger level is the point at which normal issues stop and only urgent jobs get material while a rush order is placed.
- Use one unit for everything: units per day with lead time in days, or units per week with lead time in weeks.
Results
Reorder level
2,000 units
Place an order for 2,500 units when stock falls to this level
Maximum consumption × maximum lead time = 200 × 10 = 2,000
Reorder level − (normal consumption × normal lead time) = 2,000 − (160 × 8) = 720
Reorder level + reorder quantity − (minimum consumption × minimum lead time) = 2,000 + 2,500 − (120 × 6) = 3,780
Minimum level + ½ reorder quantity = 720 + 1,250 = 1,970. This is the formula ICAI gives first.
(Minimum level + maximum level) ÷ 2 = (720 + 3,780) ÷ 2 = 2,250. ICAI's alternative, used in its worked example.
Normal consumption × emergency lead time = 160 × 3 = 480
Usage in a normal lead time: 160 × 8 = 1,280 units
Check: minimum level + normal lead-time usage = 720 + 1,280 = 2,000, the same as the reorder level.
Based on the stock level formulas in the ICAI Intermediate study material (Cost and Management Accounting, Material Cost). They use past consumption and lead times, so review the levels when usage or suppliers change. Some textbooks use minimum consumption for the danger level instead of normal consumption.
How it works
What this tool does.
Calculate the reorder level, minimum level, maximum level, average stock level and danger level from your consumption, lead times and reorder quantity, using the formulas in the ICAI cost accounting study material.
Enter the minimum, normal (average) and maximum consumption, either per day or per week, and the minimum, normal and maximum lead time in the same unit. Lead time is the time from placing an order to receiving the goods. Add the quantity you order each time and, if you have one, the lead time for an emergency purchase. The calculator applies the stock level formulas from the ICAI Intermediate study material and shows each level with the figures substituted, so you can check the working. It also flags figures that do not make sense, such as a normal lead time longer than the maximum, which would push the minimum level below zero.
Rules and dates last reviewed: October 2026
Official sources
- ICAI Board of Studies: Intermediate Paper 4, Cost and Management Accounting, Chapter 2 Material Cost (study material PDF)
- ICAI Board of Studies: Intermediate Paper 4, Cost and Management Accounting study material (chapter list)
- ICAI Board of Studies: Material Costing practice questions and solutions (Virtual Coaching Classes)
Reorder Level Calculator formula
Reorder level = maximum consumption × maximum lead time. Minimum level = reorder level − (normal consumption × normal lead time). Maximum level = reorder level + reorder quantity − (minimum consumption × minimum lead time). Average stock level = minimum level + ½ reorder quantity, or alternatively (minimum level + maximum level) ÷ 2. Danger level = normal consumption × emergency lead time. Consumption and lead time must be in the same time unit.
Worked example
A pump maker in Coimbatore uses ball bearings. Daily use ranges from 120 to 200 bearings and is normally 160. The supplier in Chennai takes 6 to 10 days to deliver, normally 8. Each order is for 2,500 bearings. A local dealer can supply in an emergency in 3 days.
- Reorder level = 200 × 10 = 2,000 bearings
- Minimum level = 2,000 − (160 × 8) = 2,000 − 1,280 = 720 bearings
- Maximum level = 2,000 + 2,500 − (120 × 6) = 4,500 − 720 = 3,780 bearings
- Average stock level = 720 + ½ × 2,500 = 720 + 1,250 = 1,970 bearings
- Alternative average = (720 + 3,780) ÷ 2 = 2,250 bearings
- Danger level = 160 × 3 = 480 bearings
The stores should raise a purchase order for 2,500 bearings when stock falls to 2,000. Stock should stay between 720 and 3,780 bearings. If it falls to 480, normal issues stop and a rush order goes to the local dealer.
Sleet ERP
Want this done on every order?
Sleet ERP alerts you when an item drops below its reorder level and drafts a purchase order with the reorder quantity and default vendor.
- Orders that matchPurchase orders are matched to the goods received and the supplier’s bill.
- Dispatch with papersDelivery challans and e-way bills for stock moving between godowns and branches.
- Labels from your itemsBarcodes print from the item master and are scanned at billing and stock counts.
Questions
Reorder Level Calculator, answered.
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What is the reorder level formula?
Reorder level = maximum consumption × maximum lead time. For example, if you use up to 200 units a day and the supplier can take up to 10 days, the reorder level is 2,000 units. ICAI also gives it as minimum level + (normal consumption × normal lead time), which comes to the same figure.
How do I calculate the reorder level if my lead time is in weeks?
Put consumption and lead time in the same unit before you multiply. If lead time is in weeks, use consumption per week. If you track daily use, convert the lead time to days first. Multiplying a daily rate by a lead time in weeks gives a reorder level far below what you need.
What is the difference between reorder level and minimum level?
The reorder level tells you when to place an order. The minimum level is the stock you should never fall below, and it is lower: minimum level = reorder level − (normal consumption × normal lead time). In a normal cycle, stock falls from the reorder level to the minimum level while you wait for the supplier, and the new goods arrive around the minimum level.
How is the maximum stock level calculated?
Maximum level = reorder level + reorder quantity − (minimum consumption × minimum lead time). It is the most you should hold, reached when use is slow and the supplier is quick. If you only know the normal and maximum consumption, ICAI treats the normal rate as the average of the minimum and maximum, so minimum consumption = 2 × normal − maximum.
Which formula does ICAI use for average stock level?
The ICAI study material gives average stock level = minimum level + ½ reorder quantity first, and (minimum level + maximum level) ÷ 2 as the alternative. Its worked illustration on stock levels uses the (minimum + maximum) ÷ 2 version. The two give different answers, so this calculator shows both. In an exam, state which one you used.
What is danger level in inventory?
Danger level is the point at which normal issues of material stop and only urgent issues are made while an emergency purchase is arranged. ICAI calculates it as average consumption × lead time for emergency purchases, and notes that minimum consumption is sometimes used instead.
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