Definition
The reorder point (ROP) is the on-hand (or inventory position) level at which you place a new order so replenishment arrives before you run out. It combines expected demand during lead time with safety stock.
Formula
Reorder point = (average daily demand × lead time in days) + safety stock
Worked example
Demand 12/day, lead time 30 days, safety stock 60 → ROP = 12×30 + 60 = 420 units. When sellable stock hits 420, order.
Why it matters for replenishment
ROP turns forecasts into a clear action date. Without it, teams reorder from gut feel and oscillate between stockouts and overstock.
How OmniRestock uses this
OmniRestock shows stockout and order-by dates from forecast, lead time and safety stock, then turns agreed lines into draft POs.