Stock reorder level formula for a small shop in Nigeria
Calculate a simple reorder point from daily sales, supplier lead time and a safety buffer, then adapt it to delivery delays and seasonal demand.
A reorder point is a signal to prepare a new purchase before a popular item is likely to run out. It is a planning estimate, not a guarantee: sales can change, a supplier can be delayed and a delivery may arrive short.
A simple reorder formula
For a stable item, start with:
Reorder point = average units sold per day × supplier lead time in days + safety stock
Supplier lead time means the usual number of days between placing an order and having the goods ready to sell. Safety stock is an extra amount chosen to cover uncertainty. Use actual experience from your shop rather than copying another business's buffer.
Worked example
A shop sells about six bags of a product per day. A supplier usually takes four days to deliver. The owner chooses a buffer of twelve bags because deliveries can vary. The estimate is:
- Daily sales: 6 bags.
- Usual delivery time: 4 days.
- Expected demand while waiting: 6 × 4 = 24 bags.
- Extra buffer: 12 bags.
- Reorder point: 24 + 12 = 36 bags.
When the usable stock approaches 36, the owner reviews the count and supplier availability. The number does not mean every order should be exactly 36; order size also depends on cash, storage, supplier minimums, expiry dates and expected demand.
Make the estimate more reliable
Use a typical day or a recent average that reflects the item's sales pattern. If sales rise during a school term, holiday or local event, a yearly average may understate demand. If an item spoils or expires, ordering extra can create a different loss. Record supplier delivery times and compare them with what was promised.
Count usable stock, not damaged or expired items. If you already have a delivery confirmed, include it in your planning notes, but do not treat it as on-hand stock until it arrives and is checked. Write down who reviewed the reorder and the date so the next person understands the decision.
ReceiptPro can keep product and sale records together, but do not assume a reorder alert is enabled unless the setting is available in your account. Start with a regular stocktaking routine, then use the observed sales and delivery pattern to set a practical threshold.