How this calculation works
Calculate lead-time demand on one period basis, add the supplied buffer and compare the trigger with a transparent inventory position. A position shortfall does not determine the economically appropriate order lot.
Threshold = demand × lead time + buffer; position = on hand + counted receipts − backordersA worked example
100 units per period over four periods plus a 66-unit buffer gives a threshold of 466. On-hand 350 plus counted receipts 100 less backorders 20 gives position 430, at or below the trigger with a 36-unit position shortfall.
Good to know
A deterministic entered trigger using equality as triggering. No dated stock trajectory, receipt reliability, reservation system, stochastic safety calculation or automatic purchase order. Avoid double-counted backorders and receipts outside the horizon.
Reference: Reference: model definitions and scope (opens in a new tab) ↗
On-hand stock and inventory position are not interchangeable
The default 350 on hand plus 100 counted receipts less 20 backorders gives a modeled inventory position of 430 units. Looking only at the shelf would give 350; ignoring the backorders would give 450. Each number answers a different question, so the components stay visible.
Only count receipts that belong within the supplied horizon. Backorders should not be subtracted again if the on-hand figure is already a net available balance. This page does not import reservations, receipt dates or your inventory system’s definitions. It cannot establish whether the business will run out before a late receipt arrives.
The safety stock calculator models a separate buffer under explicit demand and lead-time assumptions. This page accepts the buffer and compares a defined position with a defined trigger.
A trigger can be reached without identifying an order quantity
A forecast of 100 units per base period over four periods gives 400 units of lead-time demand. Add a 66-unit buffer and the threshold is 466. The default position of 430 is 36 units below that level. The 36 is a position shortfall, not an economically selected replenishment lot.
This page treats equality as triggering, so a position exactly equal to 466 is labeled at or below the trigger even though its numerical shortfall is zero. An actual system may use a strict-below policy or a review schedule. The convention matters at the boundary and is stated rather than hidden.
Put the demand rate and lead time on one base period
If demand is per day, lead time must be expressed in the same day basis. Mixing a working-day demand rate with an unadjusted calendar-day lead time can change the result. The table changes the forecast rate while holding lead time, buffer and position fixed; it is not a dated stock path.
The economic order quantity calculator models a distinct ordering/holding-cost balance. The safety stock calculator models variability under explicit assumptions. This trigger page accepts a buffer from your chosen process and does not imply that a larger buffer guarantees service or that every threshold shortfall should become a purchase order.
A few questions, answered
Is the shortfall the recommended order quantity?
No. It is only the amount by which the modeled position is below the trigger. Order lots, packs, capacities and review policies are separate.
What happens exactly at the threshold?
The page reports the trigger condition at equality. The shortfall is still zero. Your system may use a different equality policy.
Can inventory position be negative?
Yes. Counted backorders can exceed on-hand stock plus counted receipts. The signed position remains visible.
Does this predict a stockout date?
No. It does not know the timing of receipts and demand inside the horizon.