Reorder Point
Also known as: ROP, reorder level
The stock level at which you should place a new order so it arrives before you run out.
The reorder point is the inventory level that triggers a new purchase order. When stock on hand drops to this number, it is time to reorder so that the replenishment arrives just as your remaining stock (including safety stock) runs low.
The basic formula is average daily usage multiplied by lead time in days, plus your safety stock. If you sell 10 units a day and it takes 7 days to restock, your lead-time demand is 70 units; add safety stock on top.
Setting reorder points per product turns reordering from a guessing game into a rule. Inventory software can watch stock levels and flag or auto-create purchase orders when each product hits its point.
Put it into practice
Related terms
- Safety StockExtra inventory held as a buffer against demand spikes and supplier delays so you do not run out.
- Lead TimeThe total time between placing a purchase order and having that stock available to sell.
- Purchase Order (PO)A formal document a buyer sends a supplier to order goods at agreed quantities and prices.
Run it in one system
VNDLY tracks stock, orders, and suppliers together so terms like this stop being theory and start being automatic.