Inventory coverage and reorder planning: a practical guide
Calculate available stock, days of coverage and MOQ-adjusted reorder quantities using explicit lead-time and demand assumptions.
By Power CM Software · Product workflow guide
Work from available stock
Stock on hand and stock available to sell are different. Begin with stock minus allocated units, with available stock never below zero. Keep warehouse and SKU identifiers consistent so one location does not hide a shortage in another.
Daily sales is an input to the model. Choose a representative period and record unusual promotions, stockouts or seasonality. Historical daily sales is not an automatic demand forecast.
Calculate days of coverage
Days of coverage = available units ÷ daily unit sales. With 120 units on hand, 20 allocated and sales of 5 units per day, 100 available units cover 20 days. This example is illustrative and uses constant demand.
When daily sales is unknown, coverage cannot be calculated. When sales is zero, dividing by zero does not produce a useful business estimate. Stock & Margin distinguishes unknown demand from stock with no demand.
Combine lead time, target days and minimum order quantity
In the current planning model, required units = ceiling((target days + lead days) × daily sales − available units), floored at zero. A positive requirement is rounded up to a multiple of the minimum order quantity. Target days therefore represents coverage in addition to lead time; keep that definition consistent in your inputs.
Using 100 available units, 5 daily sales, 30 target days and 10 lead days gives a requirement of 100 units. If the minimum order quantity is 24, rounding up gives 120 units. These are planning quantities; review open purchase orders, supplier constraints and cash availability separately before purchasing.
Review across warehouses before ordering
Compare warehouse coverage and investigate transfer candidates before committing to more stock. Transit time, handling costs and service commitments can make a transfer unattractive even when units are available elsewhere.
Import inventory records, review critical and excess positions, then assign replenishment or transfer actions. The software calculates from your records; it does not place orders with suppliers or provide a live marketplace inventory connector.