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
- 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.
- 02Every quarter, the material planner reviews ROP settings against new lead times and usage, starting with A items.
- 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.