When Should You Reorder? A Practical Inventory Planning Guide

Inventory planning connects customer promises with supplier lead times and cash. Too little stock can interrupt sales; too much stock can tie up money you need elsewhere. Start with a simple model you can explain, then revise it as actual demand and deliveries become clearer.

Plan at the SKU and location level when availability differs. A popular product can still disappoint customers if the required size is missing or stock is held somewhere that cannot fulfill their order.

Establish usable stock and demand

Separate physical stock from units that are damaged, reserved, committed to orders or otherwise unavailable. Write down incoming quantities and realistic arrival dates. Do not treat an unconfirmed supplier promise as stock available today.

Estimate average daily demand from a relevant period. Flag promotions, seasonal changes and days when the item was unavailable. Sales during a stockout understate what shoppers might have bought, so a simple historical average can be misleading. For a new product, use a range of scenarios and a limited initial commitment instead of presenting a guess as a forecast.

Shopify inventory reports include sell-through and days-of-inventory measures. These can help identify items to review, but historical days remaining is not a guarantee about future demand or supplier performance.

Calculate a starting reorder point

For a simple continuous-review model, reorder point equals average daily demand multiplied by replenishment lead time, plus safety stock. Lead time should cover the time from placing the order until units are actually ready to sell, including receiving and inspection.

Hypothetical example: expected demand is four units per day, lead time is 15 days and your chosen buffer is 20 units. The starting reorder point is 4 × 15 + 20 = 80 units. That 20-unit buffer is an assumption to test, not a universal recommendation.

Compare the reorder point with inventory position: usable on-hand stock plus confirmed incoming stock minus outstanding demand. Avoid subtracting committed units twice if your available-stock report already removes them. Incoming stock arriving too late to prevent a gap still needs a separate timing check.

Account for your review schedule

If you review stock weekly, demand can continue for seven days before you notice a trigger. For a simple periodic-review plan, set a target covering lead time plus the review interval, then add your buffer. Suggested order quantity is that target minus inventory position, bounded below by zero and adjusted for case packs, supplier minimums and practical limits.

Using the same hypothetical demand and lead time, a seven-day review interval gives a target of 4 × (15 + 7) + 20 = 108 units. With inventory position of 50, the unrounded suggestion is 58 units. This is a planning input, not an automatic purchase instruction.

Stress-test the purchase before committing

Ask what happens if demand slows, the supplier is late or a promotion sells faster than expected. Review product shelf life, storage limits, expected margin, minimum order quantity and the date cash must leave your account. An attractive unit cost can still be a poor decision if the minimum order locks up too much cash.

Agree who can approve an order and what evidence they need. An AI assistant can summarize an inventory export or flag exceptions, but verify units, date ranges and supplier details before acting on its recommendation.

Review what actually happened

After delivery, compare expected and actual lead time, demand and stock availability. Adjust the assumptions for the next cycle. Track how often customers could not buy, how much cash sits in slow stock and whether the buffer prevented a disruption.

Use the inventory and improvement planner for the calculation and review log. The purpose is a better purchasing decision with visible assumptions, not a precise-looking forecast that nobody checks.