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In this video, the concept of the reorder point is discussed, building on previous topics like economic order quantity. The reorder point calculation determines when to reorder an item based on the quantity on hand dropping to a specific amount. It's a straightforward calculation that can be applied to both purchased and produced items. Although safety stock considerations are mentioned, the focus of this tutorial is to teach the basic reorder point calculation without incorporating a safety stock buffer. The reorder point helps streamline inventory management by signaling when new stock should be ordered.
