Restock Quantity: How Much to Order
You know when to order (reorder point). Now learn how much to order and understand Synplex's Running Low alert system.
Quick Distinction
Reorder Point (When)
Reorder Point = (Lead Time × Daily Sales) + Safety Stock
Result: "Order when inventory reaches THIS level"
Example: Order when you hit 390 units
Restock Quantity (How Much)
Restock Quantity = (Lead Time × Daily Sales) + Safety Stock - Current On-Hand
Result: "Order THIS many units now"
Example: Order 240 units (not 390)
Key difference: Reorder point is an inventory level. Restock quantity is an order amount.
The Restock Quantity Formula
Restock Qty = [Lead Time Stock + Safety Stock] - [Current On-Hand]
Or simpler:
Restock Qty = [Total need] - [What you already have]
Real Example: Running Shoes
Scenario:
Daily sales: 25 units/day
Lead time: 14 days
Safety stock: 7 days
Current on-hand: 150 units
Calculation:
Step 1: Lead time stock
├─ 25 units/day × 14 days = 350 units
└─ "I'll sell 350 units while waiting"
Step 2: Safety stock
├─ 25 units/day × 7 days = 175 units
└─ "I want 175 units as emergency buffer"
Step 3: Total need
├─ 350 + 175 = 525 units
└─ "I need 525 units total"
Step 4: Current on-hand
├─ System shows: 150 units
└─ "I have this much right now"
Step 5: Restock quantity
├─ 525 - 150 = 375 units
└─ ORDER 375 UNITS NOW
Sanity check:
├─ After ordering: On-hand stays 150 (order not received yet)
├─ Days 1-14: Sell 25/day × 14 = 350 units
├─ On-hand when shipment arrives: 150 - 350 = -200 (would stockout)
├─ BUT: 375 units arrive
├─ Inventory after arrival: -200 + 375 = 175 units ✓
└─ Perfect! You have exactly your 175-unit safety stock
Why This Formula Works
Timeline visualization:
TODAY (Day 0):
├─ On-hand: 150 units
├─ You place order: 375 units
└─ Status: Waiting
Days 1-14 (Lead time):
├─ You're selling 25/day
├─ On-hand decreasing: 150 → 125 → 100 → ... → -200 (would stockout!)
└─ BUT new shipment is coming
Day 14 (Order arrives):
├─ Your inventory: -200 (would have stockouted)
├─ Shipment brings: 375 units
├─ New inventory: -200 + 375 = 175 units
└─ SAFE! You have your safety buffer
Day 15-28 (Cycle repeats):
├─ You're back at 175 units (your safety stock level)
├─ Sales continue
├─ When you hit 525 units again, order more
└─ Cycle continues
On-Hand Inventory Accuracy Matters
The biggest mistake: Inaccurate inventory counts
TRUE on-hand: 150 units
System shows: 120 units
Problem:
├─ Total need: 525 units
├─ Order calculation: 525 - 120 = 405 units (WRONG!)
├─ You order: 405 units
├─ You arrive at delivery: 150 - 350 + 405 = 205 units
└─ OVERSTOCK by 30 units (€1,500 wasted capital)
Impact:
├─ Excess inventory ties up cash
├─ Paying carrying costs on excess
├─ Potential markdown if slow mover
└─ Real money lost
Fix:
✓ Regular inventory audits (monthly minimum)
✓ Cycle counts for fast-moving items
✓ Synplex inventory accuracy checks
✓ System configuration to alert on discrepancies
Running Low Threshold in Synplex
Running Low is an automatic status that tells you it's time to order.
How Synplex Calculates Running Low
Running Low Threshold = Lead Time Days + Safety Stock Days + (Optional Margin)
Example:
├─ Lead time: 30 days
├─ Safety stock: 10 days
├─ Optional margin: 2 days (extra buffer)
└─ Running Low threshold: 42 days
What it means:
├─ At 42 days of inventory: Status = "Running Low"
├─ On-hand: 42 × [Daily Sales] = trigger point
├─ Action: You should order NOW
For Blue T-Shirt (10 units/day):
├─ Running Low threshold: 42 days
├─ Trigger on-hand: 42 × 10 = 420 units
└─ When inventory hits 420 units, Synplex alerts you
Synplex Product Statuses
Once you set policies, Synplex automatically shows status:
HEALTHY
├─ Meaning: Inventory in good range
├─ Inventory: Between "Running Low" and "Overstocked" levels
└─ Action: Continue normal operations
RUNNING LOW
├─ Meaning: Hit your reorder point → time to order!
├─ Inventory: ≤ Running Low threshold
├─ Action: Create purchase order immediately
└─ Synplex calculation: Lead Time + Safety Stock
STOCK GAP
├─ Meaning: Gap between when you run out & when new arrives
├─ Cause: Misalignment between sales & lead time
├─ Action: Review your lead time assumptions
└─ Example: Selling faster than supplier can deliver
OVERSTOCKED
├─ Meaning: More inventory than needed
├─ Inventory: Above your maximum level
├─ Action: Hold orders, run promotions, let stock sell down
└─ Cause: Ordered too much or sales slowed
OUT OF STOCK
├─ Meaning: Zero inventory, emergency situation
├─ Action: Emergency reorder, communicate with customers
└─ Cause: Demand spike, forecast wrong, lead time extended
NO SALES
├─ Meaning: No demand detected in recent period
├─ Action: Review product, check if demand truly gone
└─ Cause: Seasonal off-season, product obsolete, or mistake
Carrying Costs: Why Accuracy Matters
Carrying cost = What it costs to hold inventory
Components:
├─ Warehouse space rental
├─ Storage equipment & materials
├─ Insurance
├─ Utilities & handling
├─ Obsolescence risk
├─ Capital opportunity cost (money tied up)
Typical range: 10-30% of inventory value annually
Example: Impact of Wrong Restock Qty
Scenario: You order too much (405 instead of 375)
Excess: 30 units
Cost per unit: €50
Excess inventory value: 30 × €50 = €1,500
Carrying cost (15% annually): €1,500 × 0.15 = €225/year
Opportunity cost: Could invest €1,500 elsewhere = €150-300/year (at 10-20% ROI)
Real impact: €375-525 lost per year from one ordering mistake!
Carrying cost by product grade:
Grade A (High value, high revenue):
├─ Carrying cost matters less (revenue justifies it)
├─ Focus: Accuracy to prevent stockouts
└─ Accept some excess for service level
Grade B (Medium):
├─ Carrying cost matters moderately
├─ Focus: Balance between service & efficiency
└─ Minimize excess while preventing stockouts
Grade C (Low value):
├─ Carrying cost matters MORE (small margins)
├─ Focus: Lean inventory, accept some stockouts
└─ Order small, frequently, to minimize excess
When to Recalculate Restock Qty
Recalculate if any factor changes:
✓ Daily sales changed significantly
→ New sales pattern, promotion ended, growth
→ Recalculate immediately
✓ Lead time changed
→ New supplier, longer customs, delays
→ Recalculate immediately (biggest impact)
✓ Safety stock changed
→ Product grade changed, volatility increased
→ Recalculate within 1 week
✓ Multiple recent stockouts
→ Safety stock too low
→ Recalculate with higher safety days
✓ Chronic overstock
→ Ordering too much or sales slowed
→ Recalculate with lower quantity or higher sales forecast
Restock Qty by Product Grade
Grade A: High-Margin Revenue Driver
Example: Winter Jacket
├─ Daily sales: 5 units
├─ Lead time: 45 days (overseas)
├─ Safety stock: 14 days (protect against stockout)
Restock qty calculation:
├─ Lead time stock: 5 × 45 = 225 units
├─ Safety stock: 5 × 14 = 70 units
├─ Total need: 295 units
├─ Current on-hand: 150 units
└─ RESTOCK QTY: 295 - 150 = 145 units
Order now: 145 units from supplier
Grade B: Core Product
Example: Blue T-Shirt
├─ Daily sales: 10 units
├─ Lead time: 30 days
├─ Safety stock: 9 days (standard)
Restock qty calculation:
├─ Lead time stock: 10 × 30 = 300 units
├─ Safety stock: 10 × 9 = 90 units
├─ Total need: 390 units
├─ Current on-hand: 150 units
└─ RESTOCK QTY: 390 - 150 = 240 units
Order now: 240 units from supplier
Grade C: Slow Mover
Example: Niche Item
├─ Daily sales: 0.5 units
├─ Lead time: 30 days
├─ Safety stock: 4 days (minimal)
Restock qty calculation:
├─ Lead time stock: 0.5 × 30 = 15 units
├─ Safety stock: 0.5 × 4 = 2 units
├─ Total need: 17 units
├─ Current on-hand: 8 units
└─ RESTOCK QTY: 17 - 8 = 9 units
Order now: 9 units from supplier
(Or batch with other products to save shipping)
FAQ
Q: What if current on-hand is higher than total need?
A: Don't order. You have enough.
Example:
Total need: 390 units
Current on-hand: 450 units
Restock qty: 390 - 450 = -60 (negative!)
Action: Don't order. Wait until inventory drops to reorder point.
Q: Should I round up the restock quantity?
A: Check supplier minimum order quantities (MOQs).
Example:
Calculated: 240 units
Supplier MOQ: 500 units (minimum)
Action: Order 500 (can't order just 240)
Result: Will be overstocked, but meets MOQ
Cost: Small excess vs. supplier relationship
Q: How often should I recalculate?
A: Minimum monthly for fast-moving products. Quarterly for stable products. Immediately if lead time changes.
Q: Can the formula work for seasonal products?
A: Yes, but update daily sales and safety stock seasonally.
Example:
Off-season (Jan-Aug): Daily sales = 2, Safety = 5 days
Peak season (Sept-Dec): Daily sales = 8, Safety = 12 days
Action: Recalculate lead time, adjust formula accordingly
Q: What if Synplex shows "Running Low" but I disagree?
A: Check your settings. May need to adjust:
- Lead time (too high?)
- Safety stock days (too high?)
- Or your sales forecast is wrong
Next Steps
- Check one product in Synplex
- Note current on-hand inventory
- Find daily sales and lead time
- Calculate restock qty using formula
- Compare to Synplex "Running Low" trigger
- If different, check settings (Insight Settings → Stock Buffer)
- Adjust and retest
Related Articles
- Reorder Points & Safety Stock — When to order
- Min-Max Inventory Levels — Order ranges
Questions?
Contact support@synplex.io for help with restock calculations.