MRP glossary TOP > Inventory Control > Reorder Point
Reorder Point
Reorder Point, Order Point
It is used in Ordering Point System (also called Fixed Size Ordering System), an inventory control method, and refers to the stock quantity to prompt the order to be released. Reorder Point is also called ROP for short, and Order Point is called OP for short, too. The Reorder Point can be obtained by summing the Safety Stock Quantity to the quantity consumed during the purchased lead time (the period of time taken from releasing an order to receiving the ordered item). The Safety Stock Quantity can be obtained by t√Ls (in which L: purchased lead time, t: safety factor, and s: standard deviation).
Related term: Fixed Size Ordering System
It is used in Ordering Point System (also called Fixed Size Ordering System), an inventory control method, and refers to the stock quantity to prompt the order to be released. Reorder Point is also called ROP for short, and Order Point is called OP for short, too. The Reorder Point can be obtained by summing the Safety Stock Quantity to the quantity consumed during the purchased lead time (the period of time taken from releasing an order to receiving the ordered item). The Safety Stock Quantity can be obtained by t√Ls (in which L: purchased lead time, t: safety factor, and s: standard deviation).
Related term: Fixed Size Ordering System
Reference：JIT Business Research Mr. Hirano Hiroyuki