What factors affect the inventory reorder point?

Four factors set an inventory reorder point: (1) demand rate — how fast the item sells (faster sales = higher trigger); (2) supplier lead time — how long replenishment takes to arrive (longer lead = higher trigger, since you must cover more selling days while waiting); (3) variability in both — demand spikes and late deliveries are why reorder points include safety stock rather than just average consumption; and (4) your service level target — how rarely you're willing to stock out (99% protection needs more buffer than 90%).

The classic formula stitches them together: reorder point = (average daily demand × lead time in days) + safety stock.

The factor everyone forgets: these inputs drift. Sales accelerate, suppliers slow down seasonally — a reorder point set in January quietly becomes wrong by June. Recalculate quarterly, or use software that updates triggers from live sales data.