Ask most small pharmacy owners how they decide when to reorder, and the honest answer is "when the shelf looks low" or "when a customer asks and we don't have it." Both work, until they don't: a patient walks out to a competitor, or a cupboard fills with stock that won't sell for a year.
Reorder points and par levels replace guesswork with two numbers per product. This guide shows how to calculate them using data you already have.
The Two Numbers That Matter
| Term | Definition | Answers the Question |
|---|---|---|
| Reorder point (ROP) | The stock level that triggers a new order | When should I order? |
| Par level (max stock) | The level you order back up to | How much should I order? |
Order quantity is simply: Par level − Current stock (rounded to the supplier's pack size).
Step 1: Find Average Daily Usage
Take units sold over a recent period and divide by the number of days:
Average daily usage = Units sold in last 90 days ÷ 90
Ninety days is a good default because it smooths out week-to-week noise while still reflecting recent demand. For strongly seasonal products (hay fever, cold and flu), use the same period last year instead.
Example: Paracetamol 500mg, 32-pack — 270 packs sold in 90 days. Average daily usage = 270 ÷ 90 = 3 packs/day
Step 2: Know Your Lead Time
Lead time is the number of days between placing an order and the stock being on the shelf.
- Daily wholesaler delivery: lead time ≈ 1 day
- Twice-weekly delivery: up to 3–4 days
- Direct-from-manufacturer orders: often 7–14 days
Use your realistic lead time, including the day you place the order, not the best case.
Step 3: Add Safety Stock
Demand isn't perfectly steady and deliveries are sometimes late. Safety stock is the buffer that covers that uncertainty.
Simple method (recommended for small pharmacies)
Safety stock = (Max daily usage × Max lead time) − (Avg daily usage × Avg lead time)
Example: On a busy day you sell 6 packs; worst-case delivery takes 3 days. Normally you sell 3 a day and delivery takes 2 days.
Safety stock = (6 × 3) − (3 × 2) = 18 − 6 = 12 packs
Statistical method (for high-value or critical lines)
Safety stock = Z × σ(daily demand) × √(lead time)
Where Z is the service-level factor (1.65 ≈ 95% in-stock, 2.33 ≈ 99%). Most small pharmacies don't need this level of precision for most products, but it's useful for critical medicines where a stock-out has real consequences for patients.
Step 4: Calculate the Reorder Point
Reorder point = (Avg daily usage × Lead time) + Safety stock
Example: (3 × 2) + 12 = 18 packs
When stock falls to 18 packs, place an order.
Step 5: Set the Par Level
The par level is how much you want on hand right after a delivery. A common approach:
Par level = Reorder point + (Avg daily usage × Days between orders)
Example: You order this line weekly (7 days). Par level = 18 + (3 × 7) = 39 packs
If stock is at 17 packs when you order, you order 39 − 17 = 22 packs, rounded to the supplier's pack or case size.
Worked Examples Across Product Types
| Product | Avg Daily | Lead Time | Safety Stock | Reorder Point | Par Level |
|---|---|---|---|---|---|
| Paracetamol 500mg (fast OTC) | 3 | 2 days | 12 | 18 | 39 |
| Amoxicillin 500mg caps | 1.5 | 1 day | 4 | 6 | 16 |
| Antihistamine (seasonal, peak) | 4 | 2 days | 10 | 18 | 46 |
| Specialist cream (slow) | 0.1 | 3 days | 1 | 2 | 3 |
Notice the slow mover: the par level is tiny. Slow movers are where over-stocking does the most damage, because excess units are the ones most likely to expire.
Common Mistakes
- Setting points once and never revisiting them. Demand changes. Review fast movers monthly and everything else quarterly.
- Ignoring expiry. Never set a par level higher than you can sell before the typical shelf-life runs out. See our expired medicine returns guide.
- Letting bulk discounts override the maths. A 10% discount on a 12-month supply is a loss if a quarter of it expires.
- Using the same rule for every product. Critical medicines deserve more safety stock than a hand cream.
- Forgetting policy changes. Changes such as Australia's 60-day dispensing make demand lumpier, so recalculate when they happen.
Let Software Do the Watching
Calculating reorder points is a one-off job per product. The hard part is watching stock levels every day across hundreds of lines. That's what pharmacy inventory software should do for you.
Medishelf shows low-stock alerts on the dashboard and on a dedicated alerts page whenever a product falls below its threshold. Stock is deducted automatically with every sale, so the numbers are always current. Learn more on our inventory page.
Reorder Point Checklist
- Average daily usage calculated from the last 90 days of sales
- Realistic lead time recorded per supplier
- Safety stock set, with more for critical medicines
- Reorder point and par level entered for your top 100 products
- Par levels checked against shelf life
- Monthly review of fast movers, quarterly for the rest
Never Miss a Reorder Again
Medishelf alerts you before you run out, and tracks every batch so you never over-stock short-dated lines.
- Read Pharmacy Stock Management System: The Complete Guide
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