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ROP
Inventory Management

ROP (Reorder Point)

Reorder Point

Inventory position at which replenishment should be triggered, typically covering lead-time demand plus safety stock.

Examples

  1. 01With daily usage of 200 units, a lead time of 5 days and safety stock of 400, the ROP is set at 1,400 units.
  2. 02Every quarter, the material planner reviews ROP settings against new lead times and usage, starting with A items.
  3. 03After the supplier's lead time drops from 5 to 3 days, the ROP is lowered to 1,000 units and stock falls by EUR 25,000.

Related terms

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