# SAP B1 Reorder Point, Safety Stock and EOQ Calculator

> Source: https://netray.co/tools/sap-b1-reorder-point-safety-stock-eoq-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Turn demand, variability and lead time into a safety stock, reorder point and economic order quantity you can key into item master and MRP settings.

## Category

sap

## Erp

SAP Business One

## Industry

Discrete Manufacturing

## Audience

- Planner
- Buyer
- SAP Business One consultant

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Average daily demand

**Key:** daily

**Type:** number

**Default:** 40

**Min:** 0

**Step:** 1

**Unit:** units/day

#### Std deviation of daily demand

**Key:** sigma

**Type:** number

**Default:** 12

**Min:** 0

**Step:** 1

**Unit:** units/day

**Help:** Calculate from at least 3 to 6 months of issue history.

#### Supplier lead time

**Key:** lead

**Type:** slider

**Default:** 14

**Min:** 1

**Max:** 120

**Step:** 1

**Unit:** days

#### Service level

**Key:** service

**Type:** select

**Default:** 0.95

**Options:**

##### 90%

**Value:** 0.9

##### 95%

**Value:** 0.95

##### 97.5%

**Value:** 0.975

##### 99%

**Value:** 0.99

#### Demand days per year

**Key:** days_year

**Type:** number

**Default:** 250

**Min:** 1

**Max:** 366

**Step:** 1

**Unit:** days

#### Cost to place one order

**Key:** order_cost

**Type:** number

**Default:** 45

**Min:** 0

**Step:** 1

**Unit:** $

#### Unit cost

**Key:** unit_cost

**Type:** number

**Default:** 18

**Min:** 0

**Step:** 0.5

**Unit:** $

#### Annual holding cost

**Key:** hold_pct

**Type:** number

**Default:** 22

**Min:** 1

**Max:** 60

**Step:** 1

**Unit:** % of cost

**Outputs:**

#### Z score for service level

**Key:** z

**Expr:** normsinv(service)

**Format:** decimal

#### Safety stock

**Key:** ss

**Expr:** z * sigma * sqrt(lead)

**Format:** integer

**Primary:** true

**Description:** Assumes constant lead time and normally distributed daily demand.

#### Demand during lead time

**Key:** ltd

**Expr:** daily * lead

**Format:** integer

#### Reorder point

**Key:** rop

**Expr:** ltd + ss

**Format:** integer

**Primary:** true

**Description:** A common value to enter as minimum inventory level for the item.

#### Economic order quantity

**Key:** eoq

**Expr:** sqrt(2 * daily * days_year * order_cost / (unit_cost * hold_pct / 100))

**Format:** integer

**Primary:** true

#### Orders per year

**Key:** orders

**Expr:** if(gt(eoq,0), daily * days_year / eoq, 0)

**Format:** decimal

#### Safety stock value

**Key:** ss_value

**Expr:** ss * unit_cost

**Format:** currency

**Chart:**

#### Safety stock and reorder point versus lead time

**Type:** line

**X:** lead

**From:** 1

**To:** 90

**Steps:** 30

**Series:**

- ss
- rop

**Disclaimer:** Statistical estimates. Validate against real demand history, supplier reliability and minimum order constraints before changing planning data.

## Content

**Intro:** SAP Business One can plan with minimum inventory levels, lead times and order multiples, but it will not tell you what those numbers should be. This calculator derives them from demand variability, lead time and service level, then adds EOQ for a sensible order quantity.

**Sections:**

#### How to use it

**Body:** Pull a few months of issues for the item and compute the average and standard deviation of daily demand. Enter the supplier lead time you actually experience, not the quoted one. Pick a service level that fits the item's importance. Then read safety stock, reorder point and EOQ, and key the results into the item master Inventory and Planning tabs.

#### The formulas

**Body:** Safety stock = Z x sigma x square root of lead time, where Z comes from the normal distribution for your service level. Reorder point = average daily demand x lead time + safety stock. EOQ = square root of (2 x annual demand x order cost / annual holding cost per unit). The chart shows how both safety stock and reorder point grow as lead time stretches.

**Bullets:**

- Z is about 1.65 at 95% and 2.33 at 99%
- Safety stock grows with the square root of lead time
- EOQ is insensitive to small input errors

#### Where the numbers go in SAP Business One

**Body:** In the item master, the Inventory Data tab holds minimum and maximum inventory levels by warehouse, and the Planning Data tab holds procurement method, lead time, order multiple and minimum order quantity used by the MRP wizard. Check field names in your version, as screens differ slightly between releases.

#### Common mistakes

**Body:** Using forecast error instead of demand deviation, ignoring supplier lead time variability, setting one service level for every item, and treating EOQ as binding when the supplier has pack sizes or price breaks. Review A items monthly and C items twice a year.

**Cta:** If you want these values computed for every item straight from your B1 history, Netray can set that up. The calculator stands on its own.

**Faq:**

#### Should reorder point be the minimum inventory level in B1?

**Answer:** Many teams use it that way for items bought on a reorder-point basis, because a shortfall below the level flags a need. Items driven by MRP from demand often use a smaller safety level instead, so choose per planning method.

#### What if lead time varies a lot?

**Answer:** This model assumes constant lead time. If supplier lead time varies, combine both variances: safety stock uses the square root of lead time x demand variance plus demand squared x lead time variance, all multiplied by Z.

#### Why is EOQ so different from my minimum order quantity?

**Answer:** EOQ balances ordering and holding cost only. Supplier minimums, packaging, price breaks and shelf life override it. Use EOQ as a reference point, then round to the practical order multiple.

#### How often should I recalculate?

**Answer:** Recalculate A items whenever demand or lead time shifts noticeably, and at least quarterly. Lower value items can be reviewed twice a year if their consumption is stable.

## Search terms

sap business one reorder point, sap b1 safety stock calculation, sap b1 min inventory level, sap business one eoq, sap b1 mrp minimum order quantity, reorder point calculator, safety stock formula, sap b1 item master planning data

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