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Reorder points

Businesses that reorder products based on fixed reorder thresholds can use reorder points. Naturally, reorder points are defined per product as a company has different thresholds for different products. Whenever the quantity on hand of a product falls below the reorder point, then that product is in a state of needing reorder.

To bring stock levels up above the reorder thresholds, a company can create reorders for all products in the state of needing reorder. Products may be purchased from different suppliers, so the reorder process often involves making reorders from all of the suppliers relevant to the products in the needing reorder state.

A reorder itself is just a purchase order with values filled in for the supplier and for the items and order quantities. If you want to adjust the order quantities, you can simply change the numbers in the order. The idea of the reorder process is to give you the default quantities to reorder in an automated process that you don't have to think about.

Reorder points are used heavily in retail and restaurants, and other businesses that do frequent stock takes and orders to keep stock levels at a steady state on a daily or weekly basis.

Example from Finale Inventory

Here is a video showing reorder points and reorders in Finale Inventory.

Reoder points

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