1. What is a PAR Level Calculator?

Definition: This calculator determines the periodic automatic replenishment (PAR) level for inventory items based on usage patterns and lead times.

Purpose: It helps businesses maintain optimal inventory levels to prevent stockouts while avoiding excessive inventory holding costs.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( \text{PAR} \) — Periodic Automatic Replenishment level (units)
• \( \text{Average Daily Usage} \) — Typical daily consumption (units/day)
• \( \text{Lead Time Days} \) — Time to receive new inventory (days)
• \( \text{Safety Stock} \) — Buffer inventory for unexpected demand (units)

Explanation: The formula calculates the inventory needed to cover usage during lead time plus an additional safety buffer.

3. Importance of PAR Level Calculation

Details: Proper PAR level estimation ensures continuous operations, reduces stockouts, optimizes cash flow, and minimizes storage costs.

4. Using the Calculator

Tips: Enter your average daily usage (units/day), lead time in days (default 7), and safety stock (default 10 units). All values must be ≥ 0.

5. Frequently Asked Questions (FAQ)

Q1: What's the purpose of safety stock?
A: Safety stock protects against unexpected demand spikes or supply delays that could cause stockouts.

Q2: How do I determine average daily usage?
A: Calculate total usage over a representative period (e.g., 3 months) divided by number of days.

Q3: What's a typical lead time?
A: Lead time varies by supplier but often ranges from 3-14 days for most industries.

Q4: Should PAR levels be adjusted seasonally?
A: Yes, for seasonal businesses, adjust PAR levels to reflect changing usage patterns.

Q5: How often should PAR levels be reviewed?
A: Review quarterly or whenever there are significant changes in usage patterns or lead times.