Reorder Point
Also known as: ROP
The on-hand inventory level at which you should place the next supplier order to avoid a stockout.
Reorder Point (ROP) is the inventory level at which you should trigger the next supplier order. The formula is ROP = (average daily sales × lead time in days) + safety stock. When on-hand falls to ROP, the math says you should place an order today.
Worked example: a SKU sells an average of 8 units per day, has a 21-day lead time, and you want 10 days of safety stock. ROP = (8 × 21) + (8 × 10) = 168 + 80 = 248 units. When on-hand drops to 248 units, place the order.
Reorder point only works if all three inputs are accurate: average daily sales must reflect recent (not all-time) velocity, lead time must reflect ACTUAL lead time (not the supplier's aspirational claim), and safety stock must reflect demand variability (not just an arbitrary buffer). Static spreadsheet ROPs become wrong fast when any of these change. SellerVault's restock engine recomputes ROP continuously from live sales velocity and historical lead time measurements.
Reorder-point restock recommendations
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