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Inventory ROP

Reorder Point

The stock level that triggers a new purchase or production order.

The reorder point is the inventory level at which you place a replenishment order so new stock arrives before you run out. It accounts for how fast you sell and how long resupply takes.

A well-tuned reorder point keeps you in stock without over-ordering, and is the backbone of automated replenishment suggestions.

Formula

ROP = (Average daily demand × Lead time) + Safety stock

Add safety stock to cover variability during the lead time.

See it in AWRA OpsHub

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