A reorder point is the inventory level at which a restaurant should place a new order so that stock is replenished before it runs out. It is based on expected usage during supplier lead time and may include a safety-stock allowance to protect against demand variation or delivery delays.
Reorder point = Average usage during lead time + Safety stock
If daily usage is reasonably stable, this can be expressed as average daily usage multiplied by lead time in days, plus safety stock.
If a kitchen uses 10 kg of butter per day, the supplier lead time is two days and the operation keeps 5 kg as safety stock, the reorder point is 25 kg. When usable stock reaches that level, a new order should be placed.
A reorder point is the trigger for placing an order. A par level is the target quantity the operation wants to have available after replenishment. The order quantity may depend on the difference between the par level and usable stock, adjusted for incoming orders and minimum order quantities.
Average usage, seasonality, supplier reliability, delivery schedules, minimum order quantities, shelf life, storage capacity and demand peaks all influence the appropriate reorder point.
Chef’s tip: Review reorder points using actual usage and supplier lead-time data. A fixed number that ignores seasonal demand or delivery delays can create both stockouts and overstocking.
Key distinction: Reorder point tells the team when to order; par level helps determine how much stock to hold or replenish.
This term is one of hundreds covered in depth across OCS courses, learning paths, and 1-on-1 coaching with Chef Eric.
