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## How to Calculate the Safety Stock Formula:

If you want to calculate the safety stock manually or know how our online stocking calculator calculates the safety stock. Follow the formula.

**Formula:**

Safety Stock= (MDUU × MLTD) – (ADUU × ALTD)

**Where:**

**MDUU**= Maximum Daily Usage Units

**MLTD**= Maximum Lead Time Days

**ADUU**= Average Daily Usage Units

**ALTD**= Average Lead Time Days

What does mean by these 4 values:

- MDUU means maximum units that have been used in a day.
- MLTD means maximum lead time for a replacement.
- ADUU refers to the average number that has been used in a day.
- ALTD refers to the average lead number for replacement.

## Safety Stock Calculation Example:

Suppose your product maximum daily usage units 25, maximum lead time days 20, average daily usage units 5, Average Lead Time Days 15. Now see how to calculate it.

=(25 * 20) – (5 * 15)

=500 – 75

=425

## How to Calculate Safety Stock and Reorder Point:

If you want to calculate safety stock and also reorder point then you can follow below formoulas.

The safety stock formula is the same; I mean that I mentioned above. You can look at the upper section or see the same procedure below.

Safety Stock=(Maximum Daily Usage Units × Maximum Lead Time Days) – (Average Daily Usage Units × Average Lead Time Days)

### How to calculate Reorder Point:

Reorder Point=(Lead time demand + Safety stock)

### How to Calculate Lead time demand:

Lead time demand=(Average Daily Usage x Average Lead Time)

Lead time demands means to the date where to the items has order until it stored on the store.

You can also see the reference link: reorder point

## How to Calculate Safety Stock and Reorder Point in Excel?

Here I will show you how to calculate safety stock and reorder point in excel. If you follow this, then you can easily calculate safety stock and also reorder point.

### Simple Safety Stock Calculation in Excel:

At first open excel and the take 4 rows and 2 columns like below table

Data name | Value |
---|---|

Maximum Daily Usage (Units): | 25 |

Average Daily Usage (Units): | 5 |

Maximum Lead Time (Days): | 20 |

Average Lead Time (Days): | 15 |

Now take another row and type Safety Stock on the first cell and then type the formula on the second column.

Data Name | Formula (Change it with cell number) |
---|---|

Safety Stock | (Maximum Daily Usage Units × Maximum Lead Time Days) – (Average Daily Usage Units × Average Lead Time Days) |

If you can’t understand then follow the below screenshot to better understand.

### Reorder Point Formula Excel:

To calculate reorder point in excel follow the below **formula**.

reorder point=(Average Daily Usage x Average Lead Time) + safety stock

Suppose your Average daily usage is 5, average daily lead time 15, and you have got safety stock 425. Now arrange data like the below table on Excel.

A | B | |

1 | Average daily usage: | 5 |

2 | Average lead time: | 15 |

3 | Safety stock: | 425 |

Now type Reorder point on A4 cell and then type the formula on B4 cell. Like below table.

4 | Reorder point: | =(B1*B2)+B3 |