1. What is Reorder Level (ROL)?

The Reorder Level (ROL) is the inventory level at which a new order should be placed to replenish stock before it runs out. It's calculated based on average usage rate and lead time.

2. How Does the Calculator Work?

The calculator uses the Reorder Level formula:

Where:

• Average Daily Usage — Expected daily consumption of the item (units/day)
• Lead Time — Time between placing an order and receiving it (days)

Explanation: The formula ensures you have enough inventory to cover demand during the lead time period.

3. Importance of ROL Calculation

Details: Proper ROL calculation helps maintain optimal inventory levels, preventing stockouts while avoiding excessive inventory holding costs.

4. Using the Calculator

Tips: Enter average daily usage in units/day and lead time in days. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I include safety stock in ROL?
A: The basic ROL formula doesn't include safety stock. For a more conservative approach, you can add safety stock to the calculated ROL.

Q2: How often should I recalculate ROL?
A: Recalculate whenever usage patterns or lead times change significantly, typically every 3-6 months.

Q3: What if my usage isn't consistent?
A: For irregular usage, use maximum daily usage instead of average, or add safety stock to account for variability.

Q4: Does this work for all inventory items?
A: This works best for independent demand items. For dependent demand items (like components), MRP systems may be more appropriate.

Q5: How does ROL differ from EOQ?
A: ROL tells you when to order, while EOQ (Economic Order Quantity) tells you how much to order.