What is reorder point in SAP SCM-FRE - Forecasting and Replenishment?

SAP Term: reorder point

• Component: SCM-FRE

• Component Name: Forecasting and Replenishment

• Description: When the level of stock falls below a certain point reorder point, the product is included in automatic replenishment.

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• Key Concepts: 
  Reorder point is a term used in SAP's Forecasting and Replenishment component of Supply Chain Management (SCM-FRE). It is the inventory level at which a company should order more of a particular item to replenish its stock. The reorder point is determined by taking into account the lead time for ordering and receiving the item, the rate of consumption, and the safety stock level. 
  
  How to use it: 
  In SAP, the reorder point can be set up in the system by entering the desired inventory level. The system will then automatically generate an order when the inventory level reaches this point. This helps to ensure that there is always enough stock on hand to meet customer demand. 
  
  Tips & Tricks: 
  It is important to set up an accurate reorder point in SAP to ensure that there is enough stock on hand to meet customer demand. It is also important to monitor inventory levels regularly and adjust the reorder point as needed. 
  
  Related Information: 
  The reorder point is closely related to other concepts such as safety stock, lead time, and order quantity. Understanding these concepts can help companies better manage their inventory levels and ensure that they have enough stock on hand to meet customer demand.