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Reorder level

The stock quantity at which a medicine should be reordered.

The textbook formula is average daily demand multiplied by lead time, plus a safety buffer. It works where there is enough sales history to estimate demand, and it is meaningless where there is not — which is the position of any new pharmacy.

A flat minimum quantity is the common substitute and it misleads in both directions. Ten units of a fast mover is two days of cover; ten units of a slow mover can be ten months, and the correct action there is the opposite of reordering.

For a shop without history, the shortbook is a better signal than any formula: it records demand you could not serve, which is the one thing sales data cannot show. Lead time from your usual stockist matters as much as the number — a next-day supplier needs far less buffer than a weekly one.

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Related terms

Shortbook (short book)The record of medicines a customer asked for that were out of stock. StockistThe distributor that supplies medicines from the manufacturer to retail pharmacies. Near-expiry stockStock close enough to expiry that it must be sold, returned or written off soon. FEFO (First Expiry First Out)Dispensing the batch that expires soonest, rather than the one received first.

All terms

Batch numberBreakage and damageCDSCOCGST, SGST and IGSTCold chainCredit noteDPCO (Drugs Prices Control Order)Drug licence (Form 20 / Form 21)Expiry returnFEFO (First Expiry First Out)Generic vs branded medicineGSTR-1GSTR-3BHSN codeInput tax credit (ITC)Loose sale (cut strip)MRP (Maximum Retail Price)Narcotic registerNear-expiry stockNPPAPack factor (units per pack)Pharmacist registrationPTR (Price to Retailer)PTS (Price to Stockist)Purchase invoiceRed-border warning labelReorder levelRetail vs wholesale drug licenceReturn to vendor (RTV)Rule 65Rx symbolSalt compositionSchedule HSchedule H1Schedule XScheme goods (free goods)Shortbook (short book)Stock rotationStockist

This glossary is a practical reference for Indian retail pharmacy, not legal, tax or clinical advice. Requirements under the Drugs & Cosmetics Rules are enforced by state drug control authorities and vary; GST treatment should be confirmed with your CA. Verify anything you intend to rely on against the current notified position. As of August 2026.