What is Reorder Point and Reorder Point Formula?

Описание: The reorder point, also known as ROP, is the inventory level at which an order is triggered to replenish the inventory stock.
Inventory management is a complex task. There are thousands of SKUs to manage every day and you need to ensure the availability of all of them. You also need to deliver a high service level, keeping low operational cost and avoid stock shortages. The lack of just one item in your factory may represent a huge lost profit per line stoppage.

Your administration staff may take time to calculate the right quantities to avoid such shortage. This process can be automated by introducing the Reorder Point methodology.

Let’s see the concept of the reorder point; know the related formula and the advantages of introducing this methodology.

You can also read about it from here: https://manufacturing-software-blog.m...

Timecode:
0:00 Introduction
1:05 What is a Reorder Point (ROP)?
1:34 Components of the Reorder Point (ROP)
2:09 An example
3:02 Benefits of using the Reorder Point (ROP)
3:53 Reorder Point Formula
4:29 Assumptions in the Reorder Point Formula
5:55 An example

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