A reorder point is a trigger, not an order quantity. It combines expected lead-time demand with protection against uncertainty.
Calculate your reorder pointThe formula
ROP = average demand during lead time + safety stock. Both terms must use compatible units.
Use inventory position
The operational comparison is usually inventory position: on hand + scheduled receipts − backorders, not on hand alone.
Worked example
At 120 units/day, 7 days of lead time, and 350 units of safety stock, lead-time demand is 840 and ROP is 1,190 units.
Timing is conditional
Days until reorder assumes constant consumption and no new receipts. Use it as a planning estimate, not a promise.
Common errors
Do not confuse ROP with EOQ, ignore review frequency, omit backorders, or use a safety stock built for a different lead-time assumption.
Decision supported
The ROP supports when to release or review replenishment. MOQ, lot size, capacity, cash, and supplier constraints determine how much to order.
Test your own assumptions.
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Calculate your reorder point