MANAGEMENT

Detailed explanation-1: -A reorder level is the point at which businesses order new stock from the supplier. In most cases, each SKU will have a specific reorder point, which is met when the number of SKUs in storage falls to a predetermined level. Once the SKU reaches this level, stock should be replenished as soon as possible.

Detailed explanation-2: -Reorder levels are critical for efficient inventory management. Not only does it help you reduce carrying costs, but it also helps prevent both overstocking and understocking, and ensures you have adequate stock to meet customer demand so that you don’t lose sales.

Detailed explanation-3: -Reorder level is the stock level of a specific product and reorder quantity is the number of units to be ordered while placing a new purchase order. Calculating inventory reorder points helps with the reduction in inventory Cost, reduces stockouts, and improves forecasting.