What a reorder level is and why medical stores need one
A reorder level is the stock quantity at which you place the next order for a medicine, so that the new delivery arrives before the shelf runs empty. The basic formula is average daily sale × supplier lead time in days + safety stock. Once you set it for your main items, you stop relying on memory or a quick look at the rack, and you avoid both empty shelves and boxes that expire unsold.
This guide is for medical store owners and purchase staff who place orders with distributors every day or two. It walks through a worked example, then explains how to adjust for slow movers, regular patients and seasonal demand. It applies to any medical store in India, with or without software.
The three numbers behind every reorder level
Average daily sale
Take the quantity sold over the last 30 or 60 days and divide by the number of days the shop was open. Use the same unit you buy in, usually strips or bottles, not loose tablets. Leave out one-off bulk sales, such as a single large order from a nursing home, because they make a normal day look busier than it is.
Lead time
Lead time is the number of days from placing an order to having the stock on your shelf and entered in your records, not just the distributor's promised delivery. If your distributor does not deliver on Sundays, or your order cut-off is early afternoon, count those delays too. Use the time it actually takes on a normal week.
Safety stock
Safety stock is the extra quantity that covers a busier-than-usual day or a late delivery. It is a judgement, not a formula. Keep more for medicines that patients cannot easily switch, for items your distributor often runs short of, and for medicines regular patients depend on. Keep less for items with plenty of substitutes or that you can get the same day. Never hold more safety stock than you can sell comfortably before expiry.
A worked example with round numbers
The figures below are made up for illustration. Use your own sales history and supplier timings.
Suppose a common fever tablet sold 360 strips over the last 30 days the shop was open. That is an average daily sale of 12 strips. Your distributor delivers in 2 days from the order. You decide on one day of safety stock, which is 12 strips.
| Step | Calculation | Result |
|---|---|---|
| Average daily sale | 360 strips ÷ 30 days | 12 strips |
| Stock used during lead time | 12 strips × 2 days | 24 strips |
| Safety stock | 1 day × 12 strips | 12 strips |
| Reorder level | 24 + 12 | 36 strips |
| Maximum level, ordering weekly | 36 + (12 strips × 7 days) | 120 strips |
| Order quantity when stock reaches 36 | 120 − 36 | 84 strips, rounded to the distributor's box size |
In plain words: when stock of this tablet drops to 36 strips, order enough to bring it back up to about 120. If the distributor packs 10 strips to a box, you would order 8 or 9 boxes depending on how close the next expiry date is. The maximum level stops you from over-buying when a sales representative offers a scheme, because anything above it is money sitting on the shelf.
Many systems call the reorder level the minimum and the upper limit the maximum, or simply min and max. The arithmetic is the same.
Fast, medium and slow movers need different rules
One formula for every item does not work in a medical store, where a few hundred medicines sell every day and a few thousand sell occasionally. Sort your items into groups using a fast-moving and slow-moving report, or by counting how many days in a month each item sold at all, and treat each group differently.
| Group | How to recognise it | Suggested approach |
|---|---|---|
| Fast movers | Sells on most days of the month | Calculated reorder and maximum levels, reviewed monthly |
| Medium movers | Sells on several days a month | Calculated levels with a small safety stock, reviewed quarterly |
| Slow movers | Sells a few times a month or less | Keep one pack or none; order against prescription or advance request |
Slow movers cause most expiry losses because a full box bought for one prescription can sit for months. If a distributor delivers daily, it is often better to order these the same day a customer asks than to keep them in stock. Our guide on controlling batches and expiry dates covers what to do with the stock that does slip through.
Regular patients and chronic medicines
Many medical stores have customers who buy the same diabetes, blood pressure or thyroid medicine every month. Their demand is predictable, so treat it as known rather than average. Keep a simple list of regular customers, the medicines they take and the quantity they usually buy, and make sure your stock covers them before the date they normally come.
If a regular customer moves away or changes prescription, that medicine's average sale drops and the reorder level should come down with it. Ask regular customers to mention any change in prescription when they visit. It keeps your shelf right and it is good service.
Adjusting for seasons and sudden demand
Demand for some products rises in particular months, for example cough and cold products in winter or oral rehydration salts in hot weather. A reorder level calculated from last month's sales will be too low at the start of the season and too high at the end.
- About a month before the season, look at the same months last year in your sales history and note which items rose and by how much.
- Raise the reorder and maximum levels for those items for the season only, and write down the date you will lower them again.
- Agree supply with your distributor early, since seasonal items can run short across a whole area.
- At the end of the season, bring levels back down before you are left holding stock that expires before next year.
For a sudden local spike, such as a fever outbreak in your area, raise levels for a few weeks and review weekly instead of monthly. Do not leave emergency levels in place after demand settles.
Why reorder alerts go wrong in medical stores
Reorder levels are only as reliable as the stock figures they are compared against. When owners say alerts are useless, the cause is nearly always the data rather than the formula.
- Duplicate items: the same medicine created twice under slightly different names splits its sales and stock, so neither entry triggers correctly.
- Purchases not entered on time: stock is on the shelf but not in the system, so the software asks you to reorder what you already have.
- Mixed units: some bills record strips and others tablets or boxes, so the average daily sale is meaningless.
- Levels set once and forgotten: demand changes with doctors, seasons and patients, and last year's level may now be wrong in either direction.
- Substitutes ignored: when you switch a patient to an equivalent brand, lower the old brand's level and set one for the new brand.
Using pharmacy software to keep levels current
A register can hold reorder levels for a few dozen items. Beyond that, software does the watching for you. In MATROP's Pharmacy Management Software, you set minimum and maximum stock for each item and the system raises reorder alerts against real-time stock. Fast-moving and slow-moving reports and sales, purchase and stock reports give you the history to calculate levels, and they export to Excel if you prefer to work them out in a spreadsheet. Supplier-wise stock and best purchase rate tracking help when you decide whom to order from. For stores with branches, stock can be transferred between them, which is often quicker than a fresh order; our article on stock control across branches explains the habits that make transfers work.
Software will not choose your safety stock or know that a regular patient has moved away. Those calls stay with you. If you are still deciding on a system, our checklist for choosing pharmacy software covers what to test first, and you can get in touch to see reorder alerts on a sample of your own items.
Questions people ask
How often should a medical store revise its reorder levels?
Review your fast movers every month and the full list at least once a quarter, plus before each season. Revise any item that runs out or keeps showing up on the near-expiry list.
How much safety stock should I keep for a medicine my distributor often runs short of?
Keep more than you would for a reliably supplied item, for example several days of sale instead of one, as long as you can sell it well before expiry. A second supplier for that item is often a better fix than a bigger buffer.
Should I set reorder levels for medicines that sell only once a month?
Usually not in the normal way. Keep one pack or none, order against a prescription, and ask regular customers who need the medicine to tell you a few days in advance.
Why does my software suggest reordering items that are already on the shelf?
The system stock is lower than the shelf stock, usually because a purchase was not entered, the same medicine exists under two item names, or units are mixed between strips and boxes. Fix the record first, then trust the alert.
