The ‘Re-Order Point’ is the level of inventory that triggers material procurement. Once the inventory falls below this level, you need to create the order proposal either manually or automatically by the system.
In the case of the manual re-order point procedure, you will define the reorder point and the safety stock in the material master. On the other hand, in the automatic re-order point procedure, the system will calculate the re-order point and the safety stock based on the next period’s consumption pattern.