
Reorder Point Formula: How to Know When to Reorder Inventory
Order too early and you tie up cash in stock you don’t need yet. Order too late and you sell out before the next
Reorder points, safety stock, and lead times — the planning that keeps you from stocking out or sitting on dead inventory.

Order too early and you tie up cash in stock you don’t need yet. Order too late and you sell out before the next

Your inventory turnover ratio counts how many times you sell through your average stock in a period. It’s the quickest read on whether cash

Inventory turnover tells you how fast a product sells. Gross margin tells you how much you keep when it does. On their own, each

Inventory planning is how you decide what to reorder, how much, and when — before a stockout or a pile of dead stock makes

Landed cost is what a unit truly costs by the time it reaches your shelf — the supplier’s price plus the freight, duty, insurance,

Lead time is the number of days between placing a purchase order and having the stock ready to sell. Get it right and your

Safety stock is the buffer inventory you hold to keep selling when demand runs hot or a shipment shows up late. Size it well
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