Reorder Point (ROP)
A reorder point, also known as Reorder Point (ROP), is the amount of stock you have left of an item when it is time to reorder. In other words, it is the point where you should place a new order if you want to avoid running out before the next delivery arrives.
Rackbeat November 28, 2025
What is the purpose of a reorder point
A reorder point helps you avoid stockouts and ensures that you always have the right items on the shelves without overfilling your warehouse. It is a key part of effective inventory management and can save you time, money, and frustration.
A properly set reorder point ensures that you
- Reorder in time, before you run out
- Reduce the risk of downtime, especially important if items are used in production or order fulfillment
- Avoid unnecessary rush orders, which are often more expensive
- Balance inventory levels, so you do not tie up capital in items you do not need right now
How do you calculate a reorder point (ROP)?
The formula for a reorder point is simple but effective
Reorder point = daily usage × lead time in days
Example
If you use an average of 10 units of an item per day and the lead time is 5 days, the calculation looks like this
ROP = 10 × 5 = 50 units
That means that when you have 50 units left in stock, it is time to reorder so the new items arrive before you run out.
You can also add a safety margin, also called safety stock, if there is uncertainty about lead time or fluctuating demand.
Reorder point in Rackbeat
In practice, you need a system that automatically monitors your inventory levels and alerts you when the reorder point is reached. A manual spreadsheet is rarely enough, and this is exactly where a modern WMS or inventory management system like Rackbeat comes in.
With Rackbeat you can
- Set up individual reorder points per item or item variant
- Get automatic notifications when an item reaches its reorder point
- Create and send purchase orders directly from the system
- Analyze your usage and adjust your ROPs continuously for optimal purchasing management
- Use a warehouse scanner for quick registration and updates of inventory levels
The result is that you do not have to keep an eye on every single stock figure manually, Rackbeat does it for you.
Do you want to avoid running out of your most important items?
A correct reorder point can be the difference between an efficient warehouse and lost revenue. With Rackbeat you get full control of your ROPs, and much more than that.
Book a no obligation online meeting with an advisor and get a personal walkthrough of how you can automate reordering and create a more robust inventory flow: