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Dear Prabin,
Reorder point = Average daily demand x lead-time in days
100 x 5 = 500 units
However you should also consider the following factors before ordering:
Thanks for the invitation.
Your re-ordering point will be calculated by knowing your average daily consumption and the time required to refill the inventory.
Therefore,
Re-Ordering Point = Average daily requirement X Lead Time in days.
ROP = X = Units.
We aso have to keep in consideration other factors as mentioned by Mr. Mostafa Abouelsaad. I agree with his answer.
I fully agree with the reply given by Mostafa Abouelsaad.
R=Daily Demand ×Lead Time (in days)
R=100×5=500 units.
Also there are several factors need to be considered as seasonal demand, safety stock.
The reorder point would be when the stock on hand is 500 pieces. Ideally you would set this supply up so that a delivery of 100 pieces is received daily, ordered on the 5-day lead time.
Every 5 days you will need to reorder.
I totally confirm Mr Mostafa Abouelsaad Answer's.
Reorder point = Average daily demand x lead-time in days
100 x 5 = 500 units
Every 5 days
