How to Calculate Your Restaurants Par Levels

Restaurant par levels are a critical component of effective inventory management and cost control. Maintaining accurate and effective par levels is a balancing act. Operators must maintain adequate inventory levels to meet customer demand, including a little extra in case they get surprised with large orders, and yet keep supplies at a minimum so they’re not running up against expiration dates and must throw out food or tie up too much cash in unused inventory. Par inventory management is one of the biggest challenges of restaurant management but neglecting to determine, meet, and adjust par level for your restaurant as necessary can be disastrous.

What is Par Level? Why Par Inventory Levels Are Important – Understanding the Par Stock Inventory System

What is par level? Par is an acronym. What does par stand for? Periodic Automatic Replacement or PAR is a system for figuring out the minimum quantities of inventory needed on hand for any specific period of time.

Par level is a fairly universal concept in any industry that uses physical inputs to produce outputs. For inventory control, restaurants specifically use par levels. The industry in general also uses par level. Think of par level as the minimum amount of inventory you need to have on hand to operate on a normal day. 

 Par level is a fairly universal concept in any industry that uses physical inputs to produce outputs. For inventory control, restaurants specifically use par levels. The industry in general also uses par level. Think of par level as the minimum amount of inventory you need to have on hand to operate on a normal day.

Calculating an accurate par level can be tricky. In the restaurant industry, par levels are even more difficult to determine.

 Par level is a fairly universal concept in any industry that uses physical inputs to produce outputs. For inventory control, restaurants specifically use par levels. The industry in general also uses par level. Think of par level as the minimum amount of inventory you need to have on hand to operate on a normal day. 

Calculating an accurate par level can be tricky. In the restaurant industry, par levels are even more difficult to determine. That said, par levels are arguably even more important in this industry! Since food ingredients maintain a high level of quality for only a short time, inventory can be a total loss if not used in time. Tastes change as well, and an unusually large order could conceivably exceed the maximum inventory of ingredients you have on hand. Par level needs to be revisited and adjusted regularly.

That said, par levels are arguably even more important in this industry! Since food ingredients maintain a high level of quality for only a short time, inventory can be a total loss if not used in time. Tastes change as well, and an unusually large order could conceivably exceed the maximum inventory of ingredients you have on hand. Par level needs to be revisited and adjusted regularly.

Accurate and regular inventory counts are key to maintaining effective restaurant par levels as this will ensure an operation always has the stock they need when they need it. Determining appropriate par levels requires a little bit of work, but the payoff and benefits of an accurate par level are worth it.

How to Calculate Restaurant Par Levels

Calculating restaurant par levels requires several pieces of data:

  • Inventory turnover rates for each item.
  • Delivery schedules for each item.
  • Customer demand for each item.
  • Average inventory on hand for each item.

Inventory Par Level Calculation for Ideal Par

Wondering how to calculate par levels? Inventory par levels can be calculated using this formula:

Weekly Inventory Use + Safety Stock/Deliveries Per Week = Recommended Par Level

As an example: 

  • 15 cases of chicken are used each week.
  • 3 cases (20%) are kept on hand as safety stock.
  • You receive 2 deliveries each week.

Using the formula, 15+3 = 18. Divide 18 by 2 deliveries to arrive at 9. The restaurant par level for chicken is 9 cases.

Remember that your par level may change over time based on seasonal demand or other factors, which is why it is so important to be doing regular inventory counts and following your sales and turnover rates every week and adjust par level as necessary. Also, note that individual ingredients and other inventory will have their own optimal par level. Determining par level for all inventory can be a considerable task, but it is worth it. Also, note that individual ingredients and other inventory will have their own optimal par level. Determining par level for all inventory can be a considerable task, but it is worth it. Armed with regular inventory par level calculation data, you’ll be able to make adjustments to your par level as soon as you notice sales are deviating from the norm, ensuring your stock is aligned with demand.

SynergySuite’s Par Inventory Level Capabilities

Knowing how to calculate your restaurant par levels will help keep your operation running smoothly without too much or too little inventory in stock and without tying up funds you could use elsewhere. Using the inventory par level calculation formula can help you avoid stockpiling food, while also avoiding running out. If you can get your par levels dialed in, you can ensure you don’t exceed inventory needs, while finding places to reduce waste.

If the idea of manual counts and calculations is giving you a headache, it’s time to put technology to work for you. SynergySuite’s inventory management solution features a Par Lists tool. Par Lists allow users to:

  • Set an optimal par level for each item
  • Set a par minimum for each item, which triggers an auto-generated re-stocking reminder
  • Segment par lists by seasons or days of the week such as days you receive specific deliveries or busy vs. less busy days
  • Create par lists that are location-specific
  • Duplicate par lists across locations
  • Sort items by category or supplier

As part of the SynergySuite platform, Par Lists are fully integrated with our inventory management solution and work with the point-of-sale functions to maintain and manage restaurant par levels based on real-time sales data making some elements of par level analysis more automatic. The automated function eases the administrative burdens of inventory management to keep operations running smoothly so you can focus on providing great customer service. Looking for more information? Check out our free ROI calculator.

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