Work the Reorder Point Math All the Way Through
Calculate and interpret a reorder point instead of treating it like a black-box ERP value.
A bearing averages 84 units of demand per day. Actual replenishment lead time is 7 days, and the team wants 160 units of safety stock. What reorder point should trigger the next order? Reorder point = demand during lead time + safety stock. The common trap is to use on-hand intuition or an outdated lead-time assumption instead of calculating how much demand will hit before replenishment arrives. Step 1 Demand during lead time = 84 units/day × 7 days = 588 units This is the amount the system expects to consume before the replenishment can arrive. Step 2 Safety stock…
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