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Reorder Point

The reorder point (ROP) is the inventory level at which a replenishment order is placed (Point 8 in the figure).  As a rule, the reorder point is set at the leadtime demand plus safety stock.

ROP = LTD + SSI

There are a variety of other inventory control policies and variables including the use of order-up-to-levels (OUL), the level of inventory a replenishment quantity should yield when it is placed; review time periods (RTP), the fixed time between inventory reviews; and a wide mix of programs for joint item replenishment.

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