What is reorder point in SAP PP-DD - Demand-Driven Replenishment?

SAP Term: reorder point

• Component: PP-DD

• Component Name: Demand-Driven Replenishment

• Description: The cumulative sum of the quantities of the red and yellow zones, which indicates that the stock buffer needs to be replenished by creating a supply order whenever the available stock falls below this point.

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• Key Concepts: 
  Reorder point is a term used in the SAP PP-DD Demand-Driven Replenishment component. It is the inventory level at which a replenishment order should be placed to ensure that the inventory level does not fall below the minimum stock level. 
  
  How to use it: 
  The reorder point can be set in the SAP system by entering the desired inventory level in the reorder point field. The system will then automatically generate a replenishment order when the inventory level reaches this point. 
  
  Tips & Tricks: 
  It is important to set the reorder point at an appropriate level to ensure that there is enough inventory to meet customer demand without overstocking. It is also important to monitor the inventory levels regularly and adjust the reorder point accordingly. 
  
  Related Information: 
  The reorder point is closely related to other concepts such as safety stock, minimum stock, and maximum stock. Safety stock is an additional amount of inventory that is kept on hand in case of unexpected demand or supply disruptions. Minimum stock is the lowest amount of inventory that should be kept on hand, while maximum stock is the highest amount of inventory that should be kept on hand.