Definitions for "Order point"
The level at which stocks are to be replenished, also reorder level. The order point is reached when the on order quantity and the stock have got to a certain minimum limit.
A specified inventory level used to trigger a reorder when the total of current on-hand inventory and open scheduled receipts falls below that level. The order point is set to cover demand expected until the order is received, and often includes a buffer based on past variability in the demand or the lead time.
A predetermined inventory levels which triggers a stock replenishment order. If the total of stock on-hand plus on-order falls to or below that point, action is taken to replenish the inventory. The order point is normally calculated as forecast usage during the replenishment lead time plus safety stock.