Reorder points: setting the trigger that starts resupply

The trigger has two parts and one horizon

Expected consumption during the replenishment lead time gives the working component; the buffer against variability gives the protective component. The horizon is the lead time itself under continuous review, extended by the review interval when stock is only examined periodically. Everything else — order size, supplier minimums, transport economics — belongs to the question of how much to order, not when to order, and mixing the two is a frequent source of muddled parameters.

Read the available position, not the shelf

The trigger should be compared against stock on hand plus quantities already on order, less anything committed to customer orders or reserved for production. Comparing against physical stock alone causes duplicate ordering, because a position that has already been replenished still looks low until goods arrive. Comparing against a position that includes unreliable supplier confirmations creates the opposite error, where a phantom incoming quantity suppresses a needed order.

Parameters decay quietly

Triggers are usually calculated once and inherited indefinitely. Demand rates drift, seasons shift the run rate, suppliers change their transit arrangements, and a trigger set for a previous set of conditions will fire too late or too early without ever announcing that it is wrong. A scheduled recalculation, or an exception report showing items whose recent behaviour has diverged from their parameters, converts this from a discovery to a routine.

Seasonality needs a moving trigger

A fixed level assumes a stable consumption rate. Where demand has a strong seasonal shape, the trigger has to rise before the season and fall after it, otherwise resupply begins too late going into the peak and continues too long coming out of it. Profiling the trigger across the year, or driving it from a forward plan rather than trailing history, addresses both errors in one change.

Frequently asked questions

Should the reorder point change when the order quantity changes?

Not directly. The trigger answers when to order and depends on lead time, demand rate and variability; the quantity answers how much. Order size does affect how often the trigger is reached and therefore how much cycle stock is carried, but it does not change the level at which resupply should begin.

What happens if demand exceeds the trigger level in one go?

A single large order can drop the position well below the trigger, and a fixed order quantity may not restore it. Systems that order up to a target level rather than by a fixed amount handle this better, which is one reason lumpy demand items are often placed on a top-up rule.

How do reorder points interact with supplier minimum quantities?

They do not change the timing, but a minimum larger than the natural order size raises average stock and lengthens the interval between orders. Where that effect is material, it belongs in the sourcing conversation, because it is a cost the supplier's terms are imposing on your balance sheet.