A par level — also called a reorder point — is the quantity at which an item should trigger a new order. Hit it and it is time to reorder; staying above it means you should not run out before the next delivery arrives. It is the simplest defense against both stockouts and dead cash tied up in overstock.
The number is a function of how fast you use the item and how long resupply takes: roughly your usage rate multiplied by the lead time, plus a cushion of safety stock for the days demand or delivery runs long. A flour that you go through at five pounds a week with a two-week lead time wants a reorder point around ten pounds, plus a buffer.
Setting par levels on your key ingredients and packaging turns reordering from a panic ("we're out of mailers") into a routine signal, and it is the everyday companion to stocktakes and inventory valuation.
Related terms
Lead Time
The time between placing an order with a supplier and having the goods in hand and ready to use, including the supplier’s processing time and shipping transit.
Safety Stock
A buffer quantity held above the reorder point to absorb unexpected demand spikes or supplier delays without causing a stockout.
Stocktake
The process of physically counting inventory at a location and comparing it to recorded quantities. Variances are reconciled by creating adjustment transactions.
Inventory Valuation
The total monetary value of all inventory currently in stock, calculated based on purchase costs. A key report for understanding the assets held in your business.