ERP
Inventory Management
Supply Chain Management
Par Level Inventory: How to Set Par Levels and Automate Restocking
Last updated: October 10, 2026 · Independent guide · We do not sell rankings or coverage.
A par level is the quantity of an item you want at a storage location right after it is restocked, and par level inventory is the practice of counting each location on a schedule and refilling it back up to that number. You set the par as average usage per period multiplied by the reorder cycle (the time until the next restock arrives), plus safety stock. Par is a fill-up-to target, which makes it different from a reorder point, which only tells you when to order. Hospital supply rooms, kitchens, hotel housekeeping and MRO storerooms use the method because frontline staff can run it and barcode scanning can automate it.
The par level process at a glance
- Define par locations and item lists. Decide where par stock lives and which items each location carries.
- Collect usage data. Measure how much of each item each location consumes per day or shift.
- Calculate the par level. Apply usage per period × reorder cycle + safety stock, then round to the pack size.
- Choose the replenishment trigger. Periodic count to par, scan-to-order, PAR cart exchange or two-bin.
- Count, order and restock. Record what is on hand, generate the refill quantity and put stock away.
- Review and reset pars. Compare pars with recent usage, stockouts and leftover stock on a fixed schedule.
Par level vs reorder point vs min/max
| Method | What triggers an order | How much is ordered | Typical setting |
|---|---|---|---|
| Par level (periodic review) | Every scheduled count | Par minus quantity counted, so the order size varies | Nursing units, kitchens, housekeeping closets |
| Reorder point | Stock falling to a set quantity, checked continuously | A fixed quantity, or whatever a separate rule says | Central warehouses with perpetual inventory |
| Min/max | Stock falling below the min | Enough to bring stock back to the max | MRO storerooms, ERP-managed stock |
The max in a min/max rule plays the same role as a par. The difference is the trigger: a par location is refilled at every count, while a min/max item is only ordered once it drops below the min. NetSuite flags items below their reorder point and then suggests “(preferred stock level + quantity needed) less (quantity available + quantity on order),” so the preferred stock level acts as an order-up-to target (NetSuite Help Center, no date shown). For reorder point and min/max logic in distribution, see our guide to inventory replenishment software.
Stage 1: Define par locations and item lists
Who owns it: the supply chain or materials manager, with the unit owner (nurse manager, executive chef, executive housekeeper or maintenance supervisor). Inputs: floor plans, the item catalog and the procedures each area performs. Outputs: a list of par locations, each with approved items, bin positions and units of measure.
The key control is an approved item list per location, because items added informally by staff cause most clutter and expired stock. RF-SMART, which sells PAR software for Oracle Cloud, recommends working with clinical staff to consolidate supplies (RF-SMART, June 29, 2021). Typical failures are duplicate storage spots, mismatched units of measure and locations nobody owns.
Stage 2: Collect usage data
Who owns it: the supply chain analyst or inventory controller. Inputs: issue transactions, restock quantities, point-of-use cabinet logs, recipe or POS depletion data in food service, and work order parts usage in MRO. Outputs: average and peak usage per item, per location, per day.
If you only have restock history, estimate usage as the quantity restocked between two counts, adjusted for the change in on-hand stock. Use 8 to 12 weeks of history where you have it, and separate weekday and weekend patterns for areas such as surgery or banquets. Consultants at BRG note that setting pars from intuition or nursing feedback leads to missing supplies and orders that do not match actual use (BRG, no date shown).
Stage 3: Calculate the par level
Who owns it: the supply chain analyst, with sign-off from the unit owner. Inputs: usage data, restock frequency, lead time, pack sizes and shelf capacity. Output: a par for every item at every location.
Par level = (average usage per period × reorder cycle in periods) + safety stock
The reorder cycle is how long the stock must last: the interval between counts plus the time the refill takes to arrive. For a supply room restocked from a central storeroom the same day, the cycle is about equal to the count interval. For a location restocked by an outside supplier, add the supplier lead time. Safety stock covers days when usage runs high or the restock is late.
Worked example (illustration). A medical-surgical unit uses an average of 12 IV start kits per day, with a busiest day of 18 over the last 12 weeks. It is restocked every two days from the central storeroom within the same shift.
| Step | Calculation | Result |
|---|---|---|
| Cycle usage | 12 per day × 2 days | 24 |
| Safety stock | (18 peak − 12 average) × 2 days | 12 |
| Par level | 24 + 12 | 36 |
| Refill at count | Count shows 9 on hand: 36 − 9 | 27, rounded up to 30 if kits ship in boxes of 10 |
For costly or critical items, a statistical safety stock based on usage and lead time variability is more precise than the peak-minus-average buffer. Confirm the par fits the shelf; if it does not, restock more often.
Hotel housekeeping uses “par” as multiples of the linens needed to dress every room once. William D. Frye recommends four pars (in rooms, in the laundry, ready for the next turnover, and in a storeroom to replace damaged linens), or five with an emergency reserve (Lodging, July 30, 2025). The logic is the same: cover the full cycle plus a buffer.
Stage 4: Choose the replenishment trigger
Who owns it: the supply chain manager. Inputs: item volume, criticality, available labor and tools. Output: a replenishment method for each location or item group.
- Periodic count to par. A technician counts each item on a schedule and orders the difference. It needs no equipment but uses the most labor.
- Scan-to-order. The technician scans a shelf label and keys the quantity on a handheld, which creates the refill request in the system. Oracle Fusion Cloud Inventory Management supports mobile PAR counts with an item scan field (Oracle 25B readiness, no date shown).
- PAR cart exchange. A full cart replaces the used one, which is refilled to par in the storeroom. Restock work stays out of busy areas, but you buy two carts per location.
- Two-bin. Each item sits in a front and back bin. When the front bin empties, staff move the back bin forward and the empty bin signals a refill, so nobody counts. The back bin is sized to cover usage during the refill time plus safety stock, so the same par math sets bin size.
Most published two-bin results come from vendors and the hospitals using them, so treat them as directional. A Cardinal Health case study cited by Becker’s Hospital Review said some nurses at Bellevue Medical Center spent up to 80% less time retrieving supplies after moving to two-bin kanban (Becker’s Hospital Review, December 2, 2016). For how kanban pull signals compare with planned replenishment, see MRP and kanban: push vs pull. Some hospitals hand the whole cycle to a distributor that delivers totes sorted by location, an arrangement similar to vendor-managed inventory.
Stage 5: Count, order and restock
Who owns it: the materials technician, storeroom clerk or kitchen manager. Inputs: the count route, par list and labels. Outputs: refill requests or purchase orders, delivered stock and updated on-hand balances.
Controls are a fixed count schedule, a tolerance that flags implausible counts and pack-size rounding. Oracle’s PAR location settings include a PAR level, an optional PAR maximum quantity used to calculate the reorder quantity, a replenishment count type and a count tolerance percentage (Oracle 25C documentation, no date shown). Since release 25B, quantity-tracked PAR locations can post a miscellaneous receipt or issue automatically when the count differs from system on-hand (Oracle 25B readiness, no date shown).
What goes wrong: counts skipped on busy days, topping up by eye instead of counting, and refills left on a cart in the hallway.
Stage 6: Review and reset pars
Who owns it: the supply chain analyst, with the unit owner approving changes. Inputs: 8 to 12 weeks of counts, refills, stockouts, emergency requests and expired stock. Output: approved par changes loaded with an effective date.
The rules below illustrate starting thresholds; tune them to your service targets:
- If an item stocked out or drew an emergency request, recalculate with current usage and raise the par.
- If more than half the par was still on the shelf at most counts, lower it toward cycle usage plus safety stock.
- If usage has shifted by more than about 20% since the last calculation, recalculate.
- Remove items with no usage in the review window.
Review high-volume and critical items monthly and the rest quarterly, and recalculate after any change in service mix, menu, bed count or supplier lead time.
Who does what: RACI by stage
| Stage | Responsible | Accountable | Consulted / informed |
|---|---|---|---|
| 1. Locations and item lists | Supply chain analyst | Supply chain manager | Unit owner (C), purchasing (C) |
| 2. Usage data | Supply chain analyst | Supply chain manager | System admin (C) |
| 3. Par calculation | Supply chain analyst | Supply chain manager | Unit owner (C), finance (I) |
| 4. Replenishment trigger | Supply chain manager | Director of supply chain or operations | Unit owner (C), technicians (I) |
| 5. Count, order, restock | Materials technician or storeroom clerk | Supply room lead | Unit owner (I) |
| 6. Review and reset | Supply chain analyst | Supply chain manager | Unit owner (C), finance (I) |
Metrics to track
- Stockout rate by location: the share of counts where an item was at zero.
- Emergency requests: runs to the storeroom outside the normal route.
- Par utilization: average usage per cycle divided by par. Persistently low values mean excess stock.
- Expired and discarded stock: units and dollars written off per location.
- Restock labor: minutes per location per restock, which shows whether scan-to-order or two-bin is paying off.
How software supports each stage
Hospital supply chain suites. Oracle Fusion Cloud Inventory Management has dedicated PAR locations with par levels and PAR maximums (Oracle 25C documentation, no date shown), plus mobile counting and a Two-Bin replenish count method with a Replenish Full Bin action (Oracle 25B readiness, no date shown). Point-of-use cabinets are another option. Omnicell says its XT supply cabinets manage consumable medical supplies by automating the replenishment process, but its product page does not explain how pars are set (Omnicell, no date shown).
General ERP. These handle par through min/max or order-up-to rules rather than a par count screen. Business Central’s Maximum Qty. policy orders the gap between projected inventory and a maximum once the reorder point is reached (Microsoft Learn, June 12, 2024). Odoo’s reordering rules order when forecasted stock falls below the min and refill to the max, with a multiple quantity for pack sizes (Odoo 18.0 documentation, no date shown).
Food service. Restaurant365 says you can set pars by item and location and that the system sends alerts or builds a suggested purchase order when stock reaches its minimum (Restaurant365 blog, no date shown). Confirm this in a demo.
MRO storerooms. In MaintainX, a part below its minimum shows in red and the suggested purchase order quantity fills to the maximum, or to the minimum if no maximum is set; purchase orders require the Premium or Enterprise plan (MaintainX Help Center, no date shown).
How we researched this
We read the pages ranking for “par level inventory” in October 2026, including guides from OneCart, UpMenu, RF-SMART and BRG. Most come from software vendors, none gives a fixed review schedule, and at least one defines par and reorder point in conflicting ways. We then checked vendor documentation for each product named and used trade press for two-bin results. The worked example and review thresholds are illustrations, not industry standards.
Related guides
- Two-Bin System: How Kanban Replenishment Works
- Inventory Holding Cost Formula: Worked Example and EOQ Use
Frequently asked questions
How do you calculate a par level?
Multiply average usage per period by the number of periods until the next restock arrives, then add safety stock. An item used 12 times a day at a location restocked every two days needs 24 units for the cycle plus a buffer. Round up to the pack size and check that it fits the shelf.
What is the difference between par level and reorder point?
A par level is the quantity you refill up to at every scheduled count, so the order size changes each time. A reorder point is the stock level that triggers an order whenever it is reached. Par suits satellite locations restocked on a route; reorder point suits stock the system tracks continuously.
How often should par levels be reviewed?
Review high-volume and critical items monthly and others quarterly, using 8 to 12 weeks of usage. Recalculate immediately after a change in service mix, menu, bed count or supplier lead time, or when stockouts appear.
Is a two-bin system better than par counting?
Two-bin removes counting, because staff only replace bins that have emptied. It needs more shelf space and discipline with the empty-bin signal. Many hospitals use two-bin for high-volume supplies and keep par counting for low-volume or bulky items.
Sources
- Oracle, PAR Location Settings, Fusion Cloud SCM 25C documentation, no date shown
- Oracle, Record PAR Counts on a Mobile Device, 25B readiness, no date shown
- Oracle, Automatically Transact Goods Based on PAR Counts for Quantity-Tracked PAR Locations, 25B readiness, no date shown
- NetSuite Help Center, Ordering Items, no date shown
- Microsoft Learn, Design details: Handling reordering policies (Business Central), June 12, 2024
- Odoo 18.0 documentation, Reordering rules, no date shown
- Restaurant365, How to set up par levels and reorder alerts with suppliers (vendor), no date shown
- MaintainX Help Center, Order and Restock Parts (vendor), no date shown
- Omnicell, XT Automated Supply Dispensing Cabinets (vendor), no date shown
- RF-SMART, PAR inventory management best practices (vendor), June 29, 2021
- BRG, Joseph Arruda and Nick Spontak, Optimizing PAR levels with data (consultancy), no date shown
- Becker’s Hospital Review, Make hospital supplies visible to help improve workflows (insights from Cardinal Health), December 2, 2016
- Lodging, William D. Frye, How many linens are enough?, July 30, 2025
- OneCart, What is par level inventory? (vendor), June 8, 2026
- UpMenu, Par level: what it is and how to set it in a restaurant (vendor), May 21, 2026
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
