Also called ROP, reorder level, minimum stock level
The reorder point is the stock level that tells you it is time to order again. It is based on how fast the product sells and how long the supplier takes to deliver. A common formula is daily sales multiplied by lead time in days, plus safety stock.
Ordering when the shelf is empty means days of lost sales while you wait. Ordering too early ties up cash. A reorder point for each product turns a daily guessing game into a simple list of what to buy. Review it when sales or supplier lead times change.
A shop sells 12 packets of a rice brand a day. The supplier takes 5 days to deliver, and the shop keeps 20 packets as safety stock. The reorder point is 12 × 5 + 20, which is 80. When stock falls to 80, it orders. Kownt X's reorder suggestions also notice seasonal spikes.