Setting up Reordering and Overstock points for each item ensures that you always have the right amount of stock in your inventory - neither less nor more.

Reordering Point (ROP) is the specific inventory level at which you can trigger a replenishment order to restock a product. It represents the minimum amount of stock that should be on hand to avoid running out before new inventory arrives. The reordering point helps balance inventory so that you neither face stockouts nor hold excessive inventory. It is typically calculated based on average daily demand, lead time, and safety stock to ensure the continuous availability of products. 

Overstock Point is the inventory level beyond which stock is considered excessive or surplus. When inventory exceeds this threshold, it indicates that you may be holding more stock than necessary, which can lead to increased holding costs, potential obsolescence, and cash flow issues. The overstock point helps you identify when to slow down or pause purchasing to optimize inventory levels and reduce waste.

Let's see how you can set them up on Refrens...

Setting Up Reordering & Overstock Points

While adding/editing Inventory Items, you will see a section called "Reorder & Overstock":

Under Item Level Stock, you can define the overall Reodering Point and Overstock Point for the item.

In case you have enabled Warehouses in your system, you will see another section here: Warehouse Level Stock.

As you see, If you are keeping your stock at different Warehouses, you might want to set Warehouse-level Reordering and Overstock points depending on the demand/capacity at those Warehouses.

That's it! Once this is set, you will be able to keep track of stock status in real-time. Let's see how:

Viewing Stock Status

Based on the Reordering and Overstock points set by you, the system will automatically categorise stock status in four categories in real-time as per the stock levels:

• Critical: Stock is dangerously low and needs immediate attention
• Low Stock: Inventory is running low; time to plan a reorder
• Well Stock: Stock levels are healthy and balanced
• Overstock: Inventory exceeds your ideal levels, avoid excess stock (when Total Stock ≥ Overstock Point)

How these Statuses Are Defined/Calculated?

• Crtical Stock: when Total Stock < Reordeing Point
• Low Stock: when Total Stock ≥ Reordering Point AND Total Stock < Well Stock Threhold
• Well Stock: when Total Stock ≥ wellStockThreshold and < Overstock Point. where, wellStockThreshold = Reordering Point + 0.3 (Overstock Point-Reordering Point)
• Overstock: when Total Stock ≥ Overstock Point

You can view these status and filter items by Stock Status directly from your Inventory Dashboard:

Your Inventory Dashboard will show you Item Level Stock Statuses. To view Warehose-level Stock Status, you will need go to your Warehouses Dashboard.

In the above image, you see that Cookies have a "Well Stock" status. Means? there are stocked well at Item Level. Now, let's see the Warehouse-level Stock Status of Cookies.

As you see, In the "Mumbai Warehouse", the stock for Cookies is low. So although we have a good overall stock of Cookies across all Warehouses (as seen in Inventory Dashboard Item Level stock), we will need to order more stock in our "Mumbai Warehouse".

That's it!

If you still have questions, feel free to drop a message on our live chat support OR email us at care@refrens.com.

Updated on: 14/07/2025