What is meant by reorder point?

The reorder point is the minimum inventory level at which the system automatically triggers a replenishment or stock transfer.

It is not to be confused with demand-driven replenishment, which occurs only when a reservation exceeds available stock.
The reorder point is monitored by a background job that checks inventory in cycles. If stock falls below a defined quantity, restocking is initiated – regardless of current demand.

Calculation example:

A company sells 50 headsets per day. The microphone supplier takes 3 days to deliver.
→ 3 days x 50 headsets/day = 150 microphones

This is the reorder point (excluding safety stock). Falling below this triggers automatic reordering.