Guides ยท Business
Inventory Reorder Point Basics
Set simple reorder points
This guide covers calculating reorder points: average demand, lead time, safety stock, and simple formulas to trigger reorders before stockouts.
- reorder point
- inventory
- safety stock
- lead time
- stockout
Gather inputs
Estimate average demand and lead time for each item.
Set safety stock
Add buffer for demand/lead time variability.
Calculate ROP
Use ROP = (demand x lead time) + safety stock.
Monitor and adjust
Review periodically as demand or lead times change.