What is 'reorder point' in SAP SRD-MD-PRD - FDN-Product Master?

reorder point - Overview

• Component: SRD-MD-PRD

• Component Name: FDN-Product Master

• Description: A stock level below which stock should be reordered. The reorder point is the sum of the safety stock plus the forecasted usage during the replenishment lead time.

reorder point - Details

• 
  Key Concepts: 
  Reorder point is a term used in SAP to refer to the inventory level at which a company should order more of a particular product. It is calculated based on the current inventory level, the rate of consumption, and the lead time for replenishment. 
  
  How to use it: 
  In SAP, reorder point can be set up in the Product Master Data component. This component allows users to set up a reorder point for each product, which will then be used to generate an alert when the inventory level reaches that point. The alert will prompt the user to order more of that product. 
  
  Tips & Tricks: 
  When setting up a reorder point in SAP, it is important to consider the lead time for replenishment. If the lead time is too long, then the inventory level may drop below the reorder point before the new order arrives. It is also important to consider any seasonal fluctuations in demand when setting up a reorder point. 
  
  Related Information: 
  Reorder point is closely related to safety stock, which is an additional amount of inventory that is kept on hand in case of unexpected demand or supply disruptions. Safety stock should be set at a level that is higher than the reorder point, so that there is always enough inventory available even if there are delays in replenishment.