A reorder point is the inventory level at which a company places an order to replenish its stock. It is typically set based on factors such as lead time, demand variability, and safety stock requirements. When the inventory level falls to the reorder point, the company places an order to ensure that it has enough inventory to meet future demand. The reorder point is an important element of inventory management, as it helps companies avoid stockouts and minimize the risk of excess inventory. By setting an appropriate reorder point, companies can improve their supply chain efficiency, reduce costs, and improve customer satisfaction.