A reorder point is the minimum inventory level at which you need to place an order to avoid running out. Most restaurants struggle with timing their orders, either tying up cash in excess inventory or facing costly stockouts. The right calculation prevents both problems and protects your profit margins.
What exactly is a reorder point?
A reorder point tells you when to order, not how much. It's the inventory threshold where you need to take action. Set it too high and your money sits idle in your cooler. Too low? You risk running out of stock during service.
💡 Example:
You use 10 kg of salmon per week. Your supplier delivers within 2 days. Your reorder point is:
- Weekly consumption: 10 kg
- Daily consumption: 10 ÷ 7 = 1.4 kg
- Lead time: 2 days
- Reorder point: 1.4 × 2 = 2.8 kg
Once your inventory drops below 2.8 kg, it's time to order.
The basic formula for reorder point
The formula is straightforward but essential for managing your cash flow:
Reorder Point = Daily Consumption × Lead Time (in days)
You calculate daily consumption by dividing your weekly or monthly usage by the number of days. Lead time is the gap between placing an order and receiving delivery.
⚠️ Note:
Count business days, not calendar days. If your supplier doesn't deliver on weekends, exclude those days from your calculation.
Adding safety stock
The basic formula assumes consistent consumption. But restaurants have unpredictable busy periods. That's why you need safety stock:
Reorder Point = (Daily Consumption × Lead Time) + Safety Stock
- Stable products: 10-20% safety stock
- Seasonal products: 20-30% safety stock
- Critical ingredients: 30-50% safety stock
💡 Example with safety stock:
Salmon example from above, with 20% safety stock:
- Basic reorder point: 2.8 kg
- Safety stock: 2.8 × 0.20 = 0.56 kg
- Total reorder point: 2.8 + 0.56 = 3.36 kg
Rounded: 3.5 kg salmon
Reorder points for different products
Not every product requires the same reorder point. You'll differentiate based on shelf life, importance, and supplier reliability:
- Fresh fish/meat: Lower inventory, more frequent ordering
- Dry goods: Higher inventory, less frequent ordering
- Critical ingredients: Always maintain safety stock, consider backup suppliers
- Seasonal products: Adjust reorder points throughout the year
Reorder point and costs
From years of working in professional kitchens, I've seen how the wrong reorder point destroys profitability. Too high ties up your working capital. Too low costs you sales through stockouts. Finding the sweet spot is crucial:
💡 Cost example:
You're holding €5,000 too much inventory because your reorder points are excessive:
- Capital costs: €5,000 × 5% interest = €250/year
- Spoilage risk: €5,000 × 10% = €500/year
- Total costs: €750/year
That's €62.50 per month in avoidable costs.
Digital support
Manually tracking reorder points for 50+ ingredients becomes overwhelming quickly. Most restaurants now use digital systems that automatically alert you once reorder points are reached.
A system like KitchenNmbrs can help you set reorder points per ingredient and send alerts at the right time, eliminating manual counting and guesswork.
How do you calculate a reorder point? (step by step)
Determine your average daily consumption
Count how much of this ingredient you use in a normal week. Divide this by 7 to get your daily consumption. Use data from at least 4 weeks for a reliable average.
Check your supplier's lead time
How many working days are there between ordering and delivery? Count only days your supplier operates. Weekends and holidays often don't count.
Calculate your basic reorder point
Multiply daily consumption by lead time. This is your minimum reorder point. Add 10-30% safety stock depending on how critical and variable the product is.
✨ Pro tip
Review your reorder points every 90 days by comparing actual consumption against your calculations. Adjust safety stock percentages based on how often you've faced stockouts or excess inventory in that period.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What if my consumption varies greatly from day to day?
Use your peak consumption day as the baseline, or bump up your safety stock to 30-50%. It's better to carry slightly more inventory than face stockouts during busy periods.
What if my supplier is unreliable with delivery times?
Increase your safety stock percentage or secure a backup supplier. An unreliable supplier will cost you more in lost sales than the extra inventory costs. Consider adding 1-2 extra days to your lead time calculation.
Can I combine reorder points with economic order quantity?
Absolutely, and you should. Your reorder point determines when to order, while economic order quantity determines how much to order. Both formulas work together to optimize your inventory costs and cash flow.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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