A reorder point is the stock level at which you place a new order, so the delivery arrives before you run out.
It covers expected sales during the supplier's lead time, plus safety stock for slower deliveries or busier days.
FORMULA
Reorder point = (average daily sales × lead time in days) + safety stock
EXAMPLE
12 units a day, a 5-day lead time and 36 units of safety stock: reorder at (12 × 5) + 36 = 96 units.