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Glossary

What is reorder quantity?

Reorder quantity is the number of units to order when stock hits the reorder point, sized to cover demand until well past the next delivery.

Definition

The reorder point says when to order; the reorder quantity says how many. The two are independent settings, and conflating them is a common setup error: a perfect trigger followed by an order for a week's worth of stock just schedules the next emergency. A workable baseline sizes the order to cover expected usage over a chosen cycle (how often you want to place orders for this item) and tops up to that level. Order too little and you pay ordering and freight costs repeatedly while flirting with stockouts; order too much and carrying cost eats the convenience. EOQ formalizes that trade-off where the volumes justify it. Reality then adjusts the math. Supplier minimums and case packs round the number, price breaks can justify going a tier up if the extra units will move within a reasonable window, shelf life caps the order for dated goods, and storage space is a hard ceiling. A drafted reorder quantity that ignores the 24-unit case pack creates a PO the supplier will round anyway, just less predictably. Where teams trip: setting quantities once at setup and never revisiting. Usage doubles, the quantity doesn't, and the item starts stockout-cycling. Reorder quantities should move when usage, lead time, or supplier terms move, which is exactly the kind of drift a system watching live usage can flag and redraft for approval.

Formula

Reorder Quantity = Average Usage per Order Cycle, adjusted for case packs, minimums, and price breaks (or EOQ where inputs are known)

Example

A fastener SKU uses about 200 units a month and the shop wants to order every two months. Baseline quantity is 400, rounded up to 500 to match the supplier's 100-unit cartons and clear the $400 free-freight threshold.

By Cameron Priest · Co-founder, Order3

Cameron co-founded TradeGecko, the inventory platform acquired by Intuit. He has spent more than a decade building software for the people who run physical stock.

Updated 2026-06-16