1. Set the reporting scope
Enter average unit demand per day for the SKU.
2. Enter the primary value
Enter the supplier lead time from order placement to sellable receipt.
3. Add supporting inputs
Add safety stock to protect against demand or delivery variation.
4. Review the result
Enter current on-hand inventory to see how far it is from the threshold.
5. Compare and act
Place or plan the replenishment order when available inventory approaches the reorder point.