Reorder Point
A reorder point is the inventory level at which replenishment should be initiated so expected demand can be covered during supplier lead time.
What this term means in maintenance
A reorder point is the inventory level at which replenishment should be initiated so expected demand can be covered during supplier lead time.
Basic reorder-point formula
Reorder point = Expected demand during lead time + Safety stock
Practical example
A filter is used at an average rate of 10 units per month. Supplier lead time is two months, and the organization holds five units of safety stock.
Reorder point = 20 + 5 = 25 units
When available stock reaches 25 units, replenishment should begin.
Inputs required
A useful reorder point depends on:
- Average demand
- Demand variability
- Supplier lead time
- Lead-time variability
- Safety stock
- Minimum order quantity
- Existing purchase orders
- Criticality
Maintenance-inventory limitations
Spare-parts demand may be irregular. Historical averages alone may not protect critical parts with rare but severe stockout consequences.
Common mistake
Using the same reorder formula for every spare without considering criticality, shelf life, repairable spares, and supplier reliability can create both shortages and excess stock.
How this term differs
Reorder Point is the inventory position that triggers replenishment. It is related to Reorder Quantity, Safety Stock, and Min-Max Inventory, but these terms describe different records, measures, roles, strategies, or decisions and should not be used interchangeably.
Related concepts
Related maintenance terms
Keep exploring connected CMMS, reliability, and maintenance planning terms.
MRO Inventory
MRO inventory consists of maintenance, repair, and operations materials used to keep assets and facilities operating but not normally sold as finished products.
Critical Spare
A critical spare is a replacement part whose unavailability could cause unacceptable equipment downtime, safety exposure, quality risk, or business interruption.
Maintenance Backlog
Maintenance backlog is approved maintenance work that has not yet been completed, commonly measured by job count, estimated labor hours, age, risk, or weeks of available labor capacity.
Glossary FAQs
- What is the reorder-point formula?
Reorder point equals expected demand during supplier lead time plus safety stock.
- Is reorder point suitable for every spare part?
No. Rare critical spares, repairable items, and parts with irregular demand may need a different stocking decision.
- What data affects reorder point?
Demand rate, demand variability, supplier lead time, lead-time variability, safety stock, and criticality.