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Reorder Point

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

Area
Inventory
Abbreviation
ROP
In this area
44 terms of 257

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.

How it is calculated

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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Related terms

Safety Stock

A buffer of extra inventory held to protect against demand or supply variability.

Lead Time

The total time between placing an order and receiving the goods.

Economic Order Quantity

EOQ

The order size that minimises the combined cost of ordering and holding stock.

Stockout

Running out of an item so demand cannot be fulfilled.

More in Inventory

ABC Analysis Asset Tracking Available to Promise (ATP) Backorder Barcode Carrying Cost Consignment Inventory Cycle Count

Reorder Point is not just a definition here

Inventory runs on this vocabulary every day in AWRA OpsHub — 44 of our 257 glossary terms describe things the platform actually does.

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