The min/max method sets a simple floor (reorder at or below this) and ceiling (reorder back up to this) for a SKU, instead of running a full reorder-point and EOQ calculation.
Min/Max Inventory Calculator
Min / Max
90 / 240
Reorder at or below 90; order back up to 240
The min/max formula
Min = (average daily usage × lead time in days) + safety buffer. Max = min + typical reorder quantity. When on-hand stock reaches min, place an order that brings the total back up to max.
Min/max trades precision for simplicity compared to a calculated reorder point and economic order quantity — it works well for SKUs with fairly stable demand, and is worth revisiting as a full reorder point calculation once demand or lead time gets more variable.
See also: the min/max glossary entry, the reorder point calculator, the EOQ calculator.
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