Restock at the right time. Not when it’s too late.

A reorder point is an inventory threshold that triggers a purchase order. It connects how quickly a product sells to how long replacement stock takes to arrive.

Build the trigger from demand

Reorder point = average daily demand × lead time + safety stock. If you sell 10 units per day and delivery takes 14 days, lead-time demand is 140 units. Add 40 units of safety stock and your reorder point is 180 units.

Measure the full lead time

Lead time starts when the order is placed and ends when stock is ready to sell. Include production, transit, customs, receiving and quality checks. Using only shipping time can create a trigger that comes too late.

Use inventory position

Inventory position is on-hand stock plus confirmed incoming stock minus backorders. Compare this figure with your trigger. Otherwise, you can order the same replenishment twice while a shipment is still in transit.

Choose a sensible buffer

One planning estimate is maximum daily demand × maximum lead time minus average daily demand × average lead time. This is a conservative shortcut that does not guarantee a service level. Revisit it when demand, seasonality or supplier performance changes. Reorder point determines when to order; order quantity remains a separate decision.