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- PAR level: what it is, the formula, and 5 industry-specific templates
PAR level: what it is, the formula, and 5 industry-specific templates
PAR level is the amount of an item you want on hand to cover demand until your next delivery, including your safety buffer. Once it is set, ordering comes down to counting what is on the shelf and topping the item back up to that level. Applied across a full stock list, that prevents both stockouts and the overordering that ties up cash and, with perishable goods, ends up as waste.
This guide gives you the formula, the difference between PAR and a reorder point, worked examples, and PAR sheets for five industries.
What is PAR level?
PAR is usually written out as periodic automatic replacement, though you will see replenishment. The safety stock built into it is the part that covers unexpected demand spikes and late deliveries.
What you order is the gap between the PAR level and what is on the shelf. Count the stock, subtract that count from the PAR level, and order the difference. is your order.
PAR began in restaurants and bars, set per ingredient. The same approach now runs hotels, hospitals, retail, and manufacturing.
PAR level formula
The formula most people use comes from hospitality:
PAR Level = (Average Usage per Period + Safety Stock) ÷ Deliveries per Period
Average usage is how much of the item you get through in the period, say a week, taken from your sales or usage history.
Safety stock is the buffer for busy stretches or late deliveries, commonly around 25% of published advice runs from 10% to 30%, so treat 25% as a starting point and tune it item by item.
Deliveries per period is how often the item is restocked. With one delivery a period, the formula is just usage plus safety stock; with more frequent deliveries, you can hold less at any one time and still not run out.
PAR vs. reorder point vs. safety stock
Three items get used as if they mean the same thing, but they do different jobs:
Term | What it is | How you use it |
Safety stock | A buffer for demand spikes or supply delays | Sits inside both PAR and the reorder point |
PAR level | A target level you top up to | Count on a schedule, order backup to PAR. |
Reorder point | A trigger level | Order the moment stock falls to it. |
PAR and the reorder point are the two most often confused. PAR works on a schedule. You count on a fixed day, say every Monday, and top each item back up to its target. A reorder point has no schedule. You set a trigger quantity, and the moment stock falls to it, you place an order. Planners call these two approaches periodic review and continuous review.
Safety stock sits inside both. Restaurants and hospital supply rooms tend to run on PAR because they already count on a routine, while distribution and manufacturing more often run on reorder points.
Industry-specific PAR templates
Below are five PAR sheets, one per industry, each applying the same formula to the items that industry tracks:
Restaurant or bar: Set per ingredient and per bottle, with a heavier buffer on high-turnover and perishable lines.
Hotel: Linens, towels, and amenities, often counted in "pars," where one par is a full set per room. Housekeeping commonly holds three parts: one in use, one in the wash, and one on the shelf.
Hospital or healthcare: Supplies in each supply room, crash cart, and clinic, topped up on a routine so a critical item is never short.
Retail: Shelf and backroom pars per SKU, turned to how fast the line sells and to promotions.
Manufacturing: Consumables, spares, and components are held to par at the line, so a missing part does not stop production.
Worked examples
One delivery a week
A bar goes through 40 bottles of a house wine a week and takes one delivery a week. With safety stock at 25% (10 bottles), PAR = (40 + 10) ÷ 1 = 50 bottles. If 18 are on the shelf on the order day, the order is 50 - 18 = 32.
More than one delivery
A kitchen uses 60 lb of chicken a week across two deliveries, with 25% safety stock (15 lb): PAR = (60 + 15) ÷ 2 = 37.5 lb per delivery. Because it restocks twice a week, it can hold less at a time and still cover demand between deliveries.
Common PAR-level mistakes
One PAR all year for seasonal items
Demand moves with the season, the weather, and local events, so a fixed PAR overstocks in the quiet months and runs short in the busy ones. Recalculate when sales shift.
Ignoring delivery variability
If a supplier is sometimes late, safety stock has to cover the worst case, not the average, or you stock out waiting on the next delivery.
Setting PAR once and forgetting it
Usage drifts over time, and a PAR nobody revisits slowly stops matching reality. Put a review on the calendar.
Ordering the PAR instead of up to it
With a PAR of 50 and 18 already on the shelf, the order is 32. Order 50 and you finish with 68, and that excess builds up every cycle.
Frequently Asked Questions
Use PAR level = (average usage period + safety stock) ÷ deliveries per period. A bar using 40 bottles a week, with 10 bottles of safety stock and one delivered a week, has a PAR level of 50 bottles.
A PAR level is a target you top up on a schedule: you count on a set day and refill to it. A reorder point is a trigger that fires the moment stock falls to a set level and prompts an order. Both include safety stock; the difference is scheduled top-up versus continuous trigger.
A PAR sheet lists your items with their PAR levels, usually next to a column for the current count, so staff can work out each order by taking the PAR level minus what is on hand.