Glossary

Reorder point

The stock level at which you should place a new order, so the delivery arrives before you run out.

Reorder point = average daily sales × lead time in days + safety stock. When stock on hand plus stock already on order falls to this number, it's time to place an order. Leave stockout days out of the daily sales average, or the reorder point comes out too low.

See the reorder point guide for a worked example.

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