--- title: "What Is a Reorder Point?" url: https://www.uncap.com/glossary/reorder-point author: "Denis Dyli" published: 2026-10-14 updated: 2026-10-28 summary: "A reorder point is the inventory level that triggers replenishment: when stock of an item falls to it, you place a new order. It is normally calculated as the forecast usage during the replenishment lead time plus safety stock, so the new goods arrive before the item runs out instead of after." --- # What Is a Reorder Point? > A reorder point is the inventory level that triggers replenishment: when stock of an item falls to it, you place a new order. It is normally calculated as the forecast usage during the replenishment lead time plus safety stock, so the new goods arrive before the item runs out instead of after. **Reorder point**: A reorder point is the inventory level that triggers replenishment: when stock of an item falls to it, you place a new order. It is normally calculated as the forecast usage during the replenishment lead time plus safety stock, so the new goods arrive before the item runs out instead of after. ## How it works There is a lag between placing an order and receiving it. The reorder point is the level of inventory needed to keep operating until the replenishment stock is delivered. The US Department of Defense supply manual compares it with an item's inventory position: on-hand stock plus stock due in minus stock due out. When that position reaches or falls below the reorder point, a replenishment order is triggered. Two quantities make up the reorder point: - Delivery time stock: the inventory needed during the lead time, from the order date to receipt. - Safety stock: the quantity held so operations can continue through a minor interruption of normal replenishment or a fluctuation in demand. Reorder point = normal consumption during lead time + safety stock. When demand is steady and the lead time is fixed, the reorder point is simply demand during the lead time: daily demand x lead time in days. A longer lead time raises the reorder point, and so does more safety stock. Order too late and a stockout can mean lost production, lost sales or both. Order too soon and inventory levels and holding costs run unnecessarily high. ## Reorder point vs. order quantity The reorder point answers when to order, not how much. That is the order quantity, which the economic order quantity (EOQ) model sets: the quantity that gives the lowest total cost to order and hold inventory. The Association of Chartered Certified Accountants (ACCA) sets the two side by side: EOQ assesses how many units to order at a time, and the reorder level gives the level to which inventory can fall before the next order goes out. ## Example Illustrative numbers only. A distributor's Inventory sold daily report shows one SKU averaging 30 units a day. The supplier's lead time is 10 days, and the distributor holds 60 units of safety stock. - Delivery time stock = 30 x 10 = 300 units. - Reorder point = 300 + 60 = 360 units. With 900 units on hand and nothing on order, days of inventory remaining is 900 / 30 = 30 days. Stock reaches the 360 trigger after (900 - 360) / 30 = 18 days, which is the day the purchase order should go out. If the supplier's lead time stretches to 14 days, the reorder point rises to 30 x 14 + 60 = 480 units. ## On Shopify The Inventory sold daily by product report shows the average number of units of each variant sold per day. The Inventory remaining per product report divides ending quantity by average daily sales over the last 28 days to estimate days of inventory remaining. For the trigger itself, Shopify suggests automated low-stock alerts with Shopify Flow, a free app on the Basic, Grow, Advanced and Plus plans. Its Product variant inventory quantity changed trigger starts a workflow when inventory changes for a product variant. Templates notify you by email when a variant's inventory is low, create a task when it drops below a set threshold, or email your vendor to initiate a reorder. Shopify's guidance for minimum and maximum levels is to set custom thresholds per variant with metafield definitions. It also suggests metafields such as supplier.lead_time_days to record supplier lead times, noting that they store information for reference and do not drive purchase order calculations. When stock hits the trigger, a purchase order records the products, quantities, costs, payment terms and supplier. After it is marked as Ordered, you can create an inventory transfer to track the shipment and receive the goods, and units on the way show as incoming. ## How Uncap helps Uncap's guide to [multi-warehouse inventory visibility](/post/multi-warehouse-inventory-visibility-order-routing) shows what happens without accurate numbers per location: purchasing teams tend to over-order at every warehouse to create a buffer against the uncertainty, and that buffer ties up working capital in stock sitting on shelves. Uncap Connect syncs inventory, pricing and order data between the ERP and the storefront in real time. ## Related terms - Safety stock - Lead time - Purchase order - Backorder - MOQ (minimum order quantity) - Shopify Flow ## Sources - DoD Manual 4140.01, Volume 2: Demand and Supply Planning - Inventory control, ACCA - Migrating from Stocky to Shopify inventory management, Shopify Help Center ## Frequently asked questions ### What is the formula for calculating the reorder point of a stock? Reorder point = normal consumption during the lead time + safety stock. With steady demand and a fixed lead time, that is daily demand x lead time in days, plus safety stock. ### What is EOQ and ROP? ROP, the reorder point, is the stock level that triggers a new order, so it decides when to order. EOQ, the economic order quantity, is the quantity with the lowest total cost to order and hold inventory, so it decides how much. ### What is the purpose of a reorder point? It marks when to reorder: the level of inventory needed to keep operating until replenishment stock is delivered, so an order placed when stock reaches it should arrive before you run out.