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in this video Im going to show you how to calculate the reorder point for inventory so the reorder point is the level of inventory which is going to trigger a new purchase of inventory its the amount where when you get down to this level of inventory you say ok its time that we do another order we have to buy some more inventory were running out ok so lets say that you sell boxes of chocolates as a small store and youve got five boxes of chocolates and I were to tell you hypothetically that the reorder point is three so if the reorder point is three and you have five boxes of chocolates you dont need to buy any more inventory youre all set if you sell one of the boxes of chocolates you still have four so you dont need to reorder any many more boxes of chocolates but if you sell another one now youve got three thats the point where you say ok were hit the reorder point we need to buy some more boxes of chocolates ok so our formula for the reorder point were gonna take the