What is rop in purchasing and supply?

ROP, or Reorder Point, is a critical inventory management metric in purchasing and supply chain management. It indicates the inventory level at which a new order should be placed to replenish stock before it runs out, taking into account lead time and demand. By calculating the ROP, businesses can maintain optimal inventory levels, reduce stockouts, and improve overall efficiency in their supply chains. This helps ensure that they can meet customer demand without overstocking.