Reorder points, EOQ, and safety stock - computed
Fintra turns your demand forecast and lead times into a reorder point, an economic order quantity, and service-level-driven safety stock - surfaced as recommendations you review before acting.
Illustrative product view
The planning math
| Number | Formula | Meaning |
|---|---|---|
| Reorder point (ROP) | demand over lead time + safety stock | When to reorder |
| Economic order quantity | sqrt(2 × annual demand × order cost ÷ (carrying % × unit cost)) | How much to order |
| Order-up-to level | ROP + EOQ | Target stock position |
| Safety stock | Z × √(lead-time and demand variability) | Buffer for a service level |
Service level drives the buffer
You set a target service level - say 95% - and Fintra converts it to a Z-factor that sizes safety stock. Higher service levels mean bigger buffers and more carrying cost; the trade-off is explicit rather than hidden in a round number someone picked years ago.
- Per-item overrides for service level, order cost, carrying cost, MOQ, and order multiples.
- Order quantities are clamped to minimum order quantities and order multiples.
- A projected stockout date shows how urgent a reorder is.
Recommendations, not surprise orders
Reorder recommendations are draft-first: Fintra surfaces what to order and when, and you accept or dismiss each one. Accepting records the decision - it does not silently place a purchase order or post a journal entry. A human stays in control of spending.
Inventory KPIs and risk
Alongside recommendations, Fintra surfaces stockout risk, excess inventory above your max, and KPIs like inventory turns and days of supply - so planning is grounded in how your inventory is actually performing.
Frequently asked questions
How do you calculate a reorder point?
A reorder point is the demand expected over the supplier lead time plus safety stock. When on-hand inventory falls to that level, it’s time to reorder. Fintra computes demand-over-lead-time from your forecast and adds a service-level-driven safety stock to set the reorder point per item.
What is economic order quantity (EOQ)?
EOQ is the order size that minimizes total ordering and carrying cost. It equals the square root of two times annual demand times order cost, divided by the product of the carrying-cost percentage and unit cost. Fintra computes it per item and clamps it to any minimum order quantity or order multiple.
How is safety stock calculated?
Fintra uses a service-level Z-factor with the variability of both demand and lead time (King’s formula), so items with volatile demand or unreliable lead times carry larger buffers at the same service level. A simpler demand-only formula is also available.
Does Fintra place orders automatically?
No. Reorder recommendations are draft-first: you review each one and accept or dismiss it. Accepting records the decision but does not automatically create a purchase order or post a journal entry, so procurement keeps control of what actually gets ordered.
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