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Reorder before
the stockout.
Estimate when to reorder a product and how much to buy after accounting for daily sales, supplier lead time, safety stock, incoming inventory, and pack size.
This uses average demand. For seasonal products, replace the average with a conservative demand estimate and review the result regularly.
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QUICK ANSWERS
What is a reorder point?
It is the stock level that should trigger a purchase order: expected demand during lead time plus a safety-stock buffer.
What does the suggested order include?
It aims to cover lead time plus the extra review period, then rounds up to your supplier’s pack size.