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The reorder point (ROP), also reorder level (ROL) or "optimal re-order level", [1] is the level of inventory which triggers an action to replenish that particular inventory. It is a minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount, the item must be reordered.
Total cost function and optimal reorder point. The total cost is given by the sum of setup costs, purchase order cost, backorders cost and inventory carrying cost:
Prior to MRP, and before computers dominated industry, reorder point (ROP)/reorder-quantity (ROQ) type methods like EOQ (economic order quantity) had been used in manufacturing and inventory management. [1] MRP was computerized by the aero engine makers Rolls-Royce and General Electric in the early 1950s but not commercialized by them.
If there are backorders, the reorder point is: =; with m being the largest integer and μ the lead time demand. Additionally, the economic order interval [ 8 ] can be determined from the EOQ and the economic production quantity model (which determines the optimal production quantity) can be determined in a similar fashion.
Reorder point – Inventory level triggering replenishment Inventory control system – Ensuring the correct level of stock Pages displaying short descriptions of redirect targets Extended newsvendor model – Mathematical model to assist inventory levels Pages displaying short descriptions of redirect targets
Image source: The Motley Fool. Abbott Laboratories (NYSE: ABT) Q4 2024 Earnings Call Jan 22, 2025, 9:30 a.m. ET. Contents: Prepared Remarks. Questions and Answers. Call Participants
A re-order buffer (ROB) is a hardware unit used in an extension to the Tomasulo algorithm to support out-of-order and speculative instruction execution. The extension forces instructions to be committed in-order.
Although a typical purchase order may not be worded as a contract (in fact most contain little more than a list of the goods or services the buyer desires to purchase, along with price, payment terms, and shipping instructions), the purchase order is a specially regarded instrument regulated by the Uniform Commercial Code or other similar law which establishes a purchase order as a contract by ...