What Is A Par In Supply Chain?
A “par” in supply chain refers to the predetermined minimum level of inventory that a business must maintain in order to meet the demand for a particular product. It is commonly used for fast-moving items with frequent sales to ensure that stocks don’t run out before the next order is placed. The par level is calculated based on the average usage rate over a period of time and takes into account lead time, order quantity, and safety stock. The goal of setting a par level is to streamline inventory management and reduce the risk of stockouts or excess inventory.