Reorder Point (ROP)
The reorder point (ROP) is the stock level that triggers a new replenishment order. It is set so that the remaining inventory covers expected demand during the lead time, plus a safety-stock buffer for variability — so replenishment arrives just as stock runs low.
Getting the reorder point right keeps availability high without over-ordering. It is a core parameter in any inventory or ERP system and the point where demand forecasting, lead time and safety stock come together.
If a product sells 50 units/day, the supplier lead time is 6 days, and safety stock is 100 units: ROP = (50 × 6) + 100 = 300 + 100 = 400 units. When stock falls to 400, a replenishment order is placed.
What is the difference between reorder point and safety stock?
Safety stock is the buffer for uncertainty; the reorder point is the trigger level, which includes both expected lead-time demand and that safety-stock buffer.