Inventory management: Reorder point (ROP)

Effective inventory management is essential for most businesses' successful operations and supply chains. This is because inventory management impacts operations, marketing, and finance. Poor inventory management hampers operations diminish customer satisfaction, and increases operating costs.
Here we will learn the inventory ordering policies.
Inventory ordering policies address the two basic issues of inventory management, which are how much to order and when to order.
A number of models are described that are used for these issues.
Inventory that is intended to meet expected demand is known as cycle stock, while inventory that is held to reduce the probability of experiencing a stock out (i.e., running out of stock) due to demand and/or lead time variability is known as safety stock.
The first issue was discussed in the previous three videos.
Here, the second issue is addressed. Where different models were explained to find the reorder point (ROP) for different situations

[@haggaigwishiri686]

Well explained

[@AlJazariedu]

Thanks

[@zahrasobih9222]

Perfect

[@AlJazariedu]

Thanks

[@jessalyn687]

is this the same with back order inventory model?

[@AlJazariedu]

@jessalyn687
Thanks for your question, Jessalyn. The answer is no. Backordering is a signal to the company that its products’ demand exceeds its supply. In such a case, the company is said to have a backlog of products. While, the reorder point is a signal to the company to release an order of a certain product once its inventory drops to this point.

[@jessalyn687]

@@AlJazariedu oh okay, thank you

[@AlJazariedu]

@sketchin1009
Watch this video and give me you feedback

[@AjayKumar-to7bk]

too fast pace

[@AlJazariedu]

Thanks for your feedback. I will consider this.