Reorder point is demand during lead time plus safety stock
The basic formula is average daily sales × lead time + safety stock. The reorder point is the stock level that triggers a purchase order; it must cover demand until the next shipment arrives, plus the buffer you choose to keep.
The target stock is higher because it also covers the review cycle — the time until you next look at inventory and place another order. If you review weekly, the target needs an extra week of demand.
Seasonality changes the daily rate, not the structure of the formula. A +30% seasonal adjustment raises the rate used in both the reorder point and the target.
Worked example: a peak-season SKU
Base daily sales 20, seasonal adjustment +30%, lead time 14 days, review cycle 7 days, safety stock 50 and current available stock 300. Seasonal daily sales are 20 × 1.30 = 26. Reorder point = 26 × 14 + 50 = 414. Target stock = 26 × (14 + 7) + 50 = 596. Suggested order = 596 − 300 = 296.
Current stock of 300 is below the reorder point of 414, so the status is “order now”. Days of cover are 300 ÷ 26 = 11.5, which is shorter than the 14-day lead time — another signal that the next shipment needs to be placed immediately.
Target stock and order quantity are different questions
The reorder point tells you when to act. The target stock tells you how much to have after the order arrives. Ordering only up to the reorder point leaves no coverage for the review cycle, so you would reorder again almost immediately.
The suggested order quantity is target stock minus current available stock, floored at zero. It ignores MOQ and pack multiples; apply those after the planning number, not before.
A seasonal adjustment is an assumption
The seasonal adjustment is a planning input, not a forecast. A +30% adjustment means “plan demand 30% above the base rate”. If the season is driven by a promotion, a new launch or a competitor stockout, the assumption can be wrong in either direction.
Use last year’s same-period sales, a current run rate and any known promotion calendar to set the adjustment. Then test a lower and higher adjustment to see how much the reorder point moves.
Where the model stops
The model handles one SKU and one location. It excludes inbound purchase orders, MOQ, pack multiples, multi-location allocation, backorders and bundle component demand. It also assumes the seasonal adjustment applies uniformly across the lead time and review cycle.
Use the safety stock calculator to derive the buffer from demand and lead-time variability, the days-of-supply calculator for a date-based coverage view, and the CSV reorder planner for multi-SKU purchasing with review cycles and pack sizes.
How to use it in a seasonal plan
Set the base daily rate from a recent non-seasonal period, then apply the seasonal adjustment for the month you are planning. Recalculate when the season turns or when a promotion changes the demand rate.
Compare the suggested order with cash and storage constraints. The formula tells you what the demand plan requires; it does not tell you what the business can afford to buy this week.