Definition
The inventory level at which a new purchase order should be placed to replenish stock before it runs out. It is calculated from the expected demand during the replenishment lead time plus safety stock. Setting the reorder point correctly avoids both stockouts and excess holding cost.
Frequently asked questions
What is Reorder Point?
The inventory level at which a new purchase order should be placed to replenish stock before it runs out. It is calculated from the expected demand during the replenishment lead time plus safety stock. Setting the reorder point correctly avoids both stockouts and excess holding cost.
Which glossary terms are related to Reorder Point?
Reorder Point is a supply chain & warehousing term in the South African import/export industry. Related terms in the same area include 3PL (Third-Party Logistics), 4PL (Fourth-Party Logistics), ABC Analysis, Bonded Logistics, Bonded Warehouse (SOS/OS) — each has its own plain-English definition in the TradeCaravan glossary.