A reorder level procedure is a stochastic replenishment method where stock is held before the actual orders come in. Therefore product is Made To Stock! The idea is to deliver to customer orders (or other requests... let's say from a warehouse or distribution center) from free available inventory; immediately! You should not - and I have seen this many times - wait until you have an order before you trigger any action to replenish and fulfill the order.
Look at the following graphic:
If you follow this simple rule you will not run out of stock - within limits of course. And that limit is defined by the service level setting of... 95%? 98%? 99%? careful! the higher the service level, the more stock you'll carry in safety.
However, if the rules are not followed you might be faced with a situation like the following: