The Reorder Point is the inventory level at which you need to order more stock. When on-hand stock falls to or below this level, Zoho Inventory alerts you (or automatically generates a purchase order if auto-reorder is configured) so the replenishment arrives before the stock runs out completely.
A simple reorder point formula is: Reorder Point = (Average Daily Usage × Lead Time in Days) + Safety Stock. For example, if you sell 20 units per day and your supplier takes 5 days to deliver, you need to reorder when you have 100 units left (plus whatever safety stock buffer you carry).
Safety Stock is the buffer inventory carried above the minimum needed — the extra cushion for demand spikes or supplier delays. The Reorder Point includes the safety stock: it is the level at which you must reorder to ensure you never dip below your safety stock before new inventory arrives.
Aaxonix is a certified Zoho implementation partner based in Pune. Architecture-first, no surprises.