Reorder point

A reorder point (ROP) is the item quantity that triggers the reorder process to begin. When the item quantity drops below the reorder point that you set, the Inventory Control application processes the reorder for that item.

You can calculate the reorder point using the following formula:

(annual usage x leadtime days) divided by 365 plus the safety stock quantity

The reorder point is a component in the automatic purchasing process.