Par levels explained: The science of never running out

Running out of chicken breast on a busy Friday night. Throwing away expired produce because you ordered too much. Every hospitality operator knows these scenarios, and both cost you money. The solution? Properly calculated par levels.

Par levels aren't just arbitrary numbers pulled from thin air. They're a calculated balance between having enough stock to serve every customer and avoiding excess that ties up cash or spoils. Get them right, and you'll never scramble for emergency orders or watch money rot in your cool room again.

What is a par level?

Your par level is the maximum amount of an item you want to have on hand between deliveries. It's your "full" point. When you do a stock count, you order enough to bring each item back up to par.

For example, if your chicken breast par is 20kg and you have 8kg on hand, you order 12kg. Simple concept, but the magic is in calculating the right par in the first place.

The basic par level formula

Here's the foundation formula:

Let's break down each component:

Average Daily Usage: How much you use on a typical day. Calculate this by reviewing the past 4 weeks of usage and dividing by days of operation.

Lead Time: How many days between when you order and when it arrives. Same-day delivery? Lead time is 1 day. Weekly delivery every Monday? Lead time is 7 days.

Safety Stock: Your buffer for unexpected spikes in demand, delivery delays, or quality issues. Typically 20-30% of your lead time usage.

Worked example

You run a restaurant that uses tomatoes. Looking at the past 4 weeks, you used 84kg over 28 days of operation. Your produce supplier delivers twice weekly (every Tuesday and Friday), so your lead time is 3-4 days. Let's use 4 days to be safe.

• Average daily usage: 84kg ÷ 28 days = 3kg/day
• Lead time usage: 3kg/day × 4 days = 12kg
• Safety stock: 12kg × 25% = 3kg
• Par level: 12kg + 3kg = 15kg

So your tomato par is 15kg. Every Tuesday and Friday before the delivery, you count how many kilos you have left. If you have 6kg on hand, you order 9kg to bring you back to 15kg.

Factors that affect your par levels

The basic formula works for stable, predictable items. But real hospitality is messier. Here are the factors that require adjustments:

1. Usage variance

If your daily usage swings wildly (2kg Monday, 8kg Friday), you need more safety stock. Calculate the standard deviation of your daily usage and add 1-2 standard deviations to your par.

Practical approach: If your usage varies by more than 50% day-to-day, increase your safety stock to 40-50% instead of 25%.

2. Supplier reliability

Does your supplier sometimes run out of items? Deliver late? You'll need higher safety stock to compensate. A reliable supplier lets you run leaner pars.

3. Shelf life

Fresh seafood with a 2-day shelf life? Keep your par tight, order more frequently. Dried pasta with a 2-year shelf life? You can carry higher pars without spoilage risk.

4. Storage space

You might want a 50kg flour par for cost savings, but if you only have room for 30kg, space wins. Always factor in your actual storage capacity.

Setting different pars for different days

Here's where operators get more sophisticated. Your Friday usage isn't the same as your Tuesday usage, so why use the same par level?

Day-specific pars: Calculate separate par levels for weekdays vs weekends (or even per day of the week). This prevents over-ordering for slow periods and under-ordering before busy services.

Example: Day-specific pars

A restaurant averages 2kg ribeye usage Monday-Thursday, but 8kg Friday-Saturday. If they deliver twice weekly (Monday and Friday), they should have two different pars:

• Monday delivery par: Cover Mon-Thu (4 days × 2kg = 8kg) + Fri-Sat spike (2 days × 8kg = 16kg) + safety stock (24kg × 25% = 6kg) = 30kg total
• Friday delivery par: Cover Fri-Sat (2 days × 8kg = 16kg) + Mon-Thu (4 days × 2kg = 8kg) + safety stock (24kg × 25% = 6kg) = 30kg total

In this case, the par stays the same because the weekly cycle is consistent. But if they had a Monday-only delivery, their Friday pre-order would need a much higher par to cover the weekend rush.

When to adjust your par levels

Par levels aren't static. You should review and adjust them regularly based on changing conditions:

1. Seasonal changes

Summer patio season means higher beer usage. Winter means more soup ingredients. Adjust pars quarterly or when you notice consistent usage changes over 2-3 weeks.

2. Menu changes

Added a new pasta dish? Increase your pasta and sauce pars. Removed the salmon salad? Drop your salmon par immediately. Every menu change should trigger a par level review.

3. Events and promotions

Running a burger promotion? Hosting a private event? These create temporary demand spikes. Calculate a temporary par for the event period, then revert to standard pars afterwards.

4. Delivery frequency changes

Switched from weekly to twice-weekly deliveries? Your lead time just halved, so you can reduce your pars and free up cash. Going the other direction? Increase your pars proportionally.

Common par level mistakes

1. Set and forget

Setting pars once and never reviewing them is the most common mistake. Usage patterns change. Menus evolve. Suppliers adjust delivery schedules. Review your pars monthly at minimum, weekly for high-turnover perishables.

2. Emotional ordering

"I ran out last week, so now I'll order way more to be safe." This creates a boom-bust cycle of stockouts followed by excess. Stick to the formula. If you had a stockout, increase your safety stock percentage by 10-20%, not by doubling your order.

3. Ignoring waste patterns

If you're consistently throwing away spoiled items, your par is too high or your usage estimate is wrong. Track waste for 2 weeks and recalculate your average daily usage based on what you actually sold or used, not what you ordered.

4. One par for everything

High-turnover items (milk, bread, fresh produce) need different par strategies than low-turnover items (spices, canned goods). Don't apply the same logic universally. Segment your inventory into A, B, and C items based on value and turnover, and tailor your approach.

Putting it all together

Par levels are part science, part art. The formula gives you the science: a data-driven starting point based on actual usage, lead times, and variability. The art comes in adjusting for your specific operation: your suppliers, your storage, your menu mix, your customer patterns.

Start with the basic formula. Track your usage religiously for a month. Adjust pars based on what the data tells you. Review monthly. Respond to menu changes immediately. And always, always calculate before you order.

Done right, par levels eliminate stockouts, reduce waste, free up cash tied up in inventory, and give you confidence that you'll have exactly what you need, when you need it.

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About the author: The Equimise team is dedicated to helping hospitality operators run smarter, waste less, and grow profitably with intelligent back-of-house systems.