The point at which businesses decide to reorder the stock is known as reorder point. The point at which the companies order for the first time is known as order point. When the inventory of the company is utilized and the company is left with the safety stock, which is the level of inventory that is maintained by the company to buffer against stock-outs, the company orders for more inventory. The time difference between the reorder point and the renewed inventory level is known as lead time. This is known asinventory management.