PAR level (Periodic Automatic Replenishment level) is the minimum quantity of an item that should be on hand at the start of an order cycle to meet expected demand without stockouts. It is the target inventory level that a replenishment system orders up to — you reorder enough to bring inventory back to PAR.
Quick answers
What is a PAR level? A PAR level is the target on-hand inventory quantity for an item, sized so that it covers consumption over the order cycle plus a safety buffer. When inventory drops below PAR, you reorder enough to bring it back up.
What does PAR mean in inventory? PAR stands for Periodic Automatic Replenishment. In food service and retail, it's the minimum quantity an operator commits to having available at the start of every order cycle.
How do you calculate a PAR level? PAR = (consumption rate × order frequency in days) + safety stock. Safety stock is computed statistically as z × σ × √(order frequency), where z is the z-score for your target service level (1.28 for 90%, 1.65 for 95%) and σ is the standard deviation of daily demand.
What's a good PAR level? There is no universal answer. The right value depends on your consumption rate, order frequency, lead time, demand variability, and target service level. Statistical methods give you a defensible per-item number; gut-feel produces over-ordering on slow movers and stockouts on fast ones. Use the free PAR level calculator to compute yours.
The formula
The conceptually correct PAR level has three components:
PAR = base demand + statistical safety stock + manual buffer
where: