Why your reorder point is probably wrong (and the seasonal fix).

Most reorder points are wrong by 30–60% in any given month. Not because the formula is bad — the formula is fine — but because almost everyone runs it on a flat 12-month average and forgets that the world isn't flat.

Here's the formula every inventory textbook teaches:

Reorder Point = (Average Daily Demand × Lead Time) + Safety Stock

It's correct. Run it for any product, any time of year, against the trailing 12 months, and you'll get a number that tells you when to reorder. If you use that number every month, you'll stock out twice a year — once heading into your seasonal peak, once on the way down.

Why?

The flat-average trap

Imagine you sell a product that moves 10 units a day in normal months and 30 units a day in November. Trailing 12-month average daily demand is 11.7 units (10 × 11 months + 30 × 1 month, divided by 365 days, give or take).

If your lead time is 30 days and you carry one lead-time of safety stock, your reorder point is 702 units.

In October that number is way too high — you'll order too much, too early.
In November-December, it's way too low — you'll stock out 12 days into your peak.

The math is fine. The inputs are wrong. You're using yesterday's average to predict tomorrow's demand, in a business where tomorrow doesn't look like yesterday.

The seasonal fix

There are three layers to a reorder point that adjusts for seasonality:

1. Detect seasonality per SKU

Not at the category level, not at the brand level — every SKU has its own pattern. A coffee mug might peak in November (Christmas gifting) while a coffee bean might peak in May (Mother's Day). Flat averages mash these together. Per-SKU detection means each product gets its own seasonal profile.

2. Project demand for the lead-time window, not the past 12 months

If your lead time is 30 days and you're in October, you don't care about January's average. You care about what November is likely to bring. Pull the same 30-day window from each of the last two years, blend with current trend.

3. Floor the seasonal value at the standard one

This is the safety net. The seasonal calculation is a best estimate; it shouldn't drag your reorder point below the trailing average, only above it when the season warrants. If your seasonal projection comes in lower than the standard, use the standard.

What this looks like in practice

In Stocura, every SKU has two reorder points side by side: Standard (the textbook trailing-average number) and Seasonal (the lead-time-window-aware number). When seasonal is higher, the dashboard uses seasonal as the trigger — you get the alert earlier going into peak. When seasonal isn't materially different, the standard wins.

For a Mother's Day-heavy SKU at Personalised Favours, the difference looks like this:

• Standard reorder point (trailing 12mo): 9 units
• Seasonal reorder point (May arrival window): 26 units

Stocura uses 26. We get the alert with three weeks of buffer instead of three days.

Why this matters more than people think

Stock-outs in your peak season cost you 3–5x more per dollar of missed sale than stock-outs in shoulder season — because your customer-acquisition spend is sunk by then. You've already paid Google and Meta to drive the traffic. If you can't fulfil, you've handed your margin to the ad networks.

Get the seasonal fix right, and you stop sponsoring your competitors during peak.