How to set par levels for a small restaurant

A par level is the amount of an item you want on hand after a delivery arrives. Set it too low and you run out mid-service; set it too high and cash sits on the shelf, or in the bin. The good news is that you don't need software or a consultant to set sensible par levels. You need a few weeks of honest counts and a simple formula.

What a par level is (and isn't)

A par level is a target, not an order. When you place an order, you order the difference between the par level and what you counted:

• Order quantity = par level − quantity on hand

So if your par for lemons is 4 cases and you count 1.5 cases, you order 2.5 cases (rounded to whatever your supplier sells).

A reorder point is a related idea: the quantity at which you should place an order between regular deliveries. Small restaurants that order on a fixed schedule usually start with par levels and add reorder points only for fast-moving items.

Step 1: Count the same way every week

Par levels are only as good as your counts. Before you calculate anything:

1. Count at the same time each week, ideally just before your order goes in.
2. Count in shelf order, using the same unit every time (case, bag, kg, bottle).
3. Record open containers in consistent fractions, such as quarters.
4. Write down waste separately so you can tell usage from spoilage.

Our free weekly inventory count sheet has the columns you need.

Step 2: Work out your usage per day

For each item, take two counts a week apart and add what was delivered in between:

• Usage for the week = last count + deliveries − this count
• Usage per day = usage for the week ÷ days you were open

Do this for three or four weeks and take the average. One busy weekend shouldn't set your par for the whole season.

Step 3: Look at your delivery schedule

The next number is how many days a delivery has to last. If a supplier delivers on Monday and Thursday, the longest gap is four days (Thursday to Monday). Use the longest gap, not the average, or you'll run short on the long stretch.

Add the lead time too: if you must order two days before delivery, the stock you have when you order has to last those two days as well.

Step 4: Add a safety buffer

Usage varies. A safety buffer (often called safety stock) covers busy days, late trucks and short deliveries. A simple starting point is half a day to a day of usage for most items, more for items you can't run out of and that keep well, less for items that spoil quickly.

Step 5: Put it together

• Par level = usage per day × days between deliveries (including lead time) + safety buffer

Example: you use 0.6 cases of lemons a day, the longest gap between deliveries is 4 days, and you keep half a day as a buffer.

• 0.6 × 4 = 2.4 cases
• Buffer: 0.6 × 0.5 = 0.3 cases
• Par level: 2.7 cases, rounded up to 3 cases

Step 6: Review par levels regularly

Par levels drift out of date when menus, seasons or suppliers change. Review them:

• whenever you change the menu or a supplier,
• when the same item runs out twice in a month,
• when the same item is thrown away twice in a month.

How Cayro helps

In Cayro Inventory you set a par level and reorder point for each product at each location. Counts can be blind, so the person counting doesn't see the expected quantity, and a manager reviews the differences before stock is adjusted. When stock drops below the reorder point, Cayro raises a low-stock alert, suggests a quantity and can draft a purchase order for approval. With Cayro Flow you can automate the follow-up, such as alerting purchasers whenever stock runs low.

Want to see it with your own items? Start a free 14-day trial or look at pricing.