Work out how much stock to hold, and when to reorder, so you never run short between deliveries without carrying excess inventory that ties up cash.
Usage & supply cycle
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Par level is the amount of stock you need on hand to comfortably reach your next delivery, plus a safety buffer for unexpected demand or a late delivery. The reorder point is the stock level that should trigger a new order — set too low and you risk running out before the next delivery arrives; set too high and cash sits in the storeroom instead of the bank. Both numbers depend on getting your average daily usage right, which is worth checking against actual consumption data rather than a rough estimate, particularly for high-value or fast-moving items. For the broader purchasing and waste discipline this fits into, see our food waste cost calculator.
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Reorder point is the stock level that should trigger a new order — calculated from usage during the supplier's lead time alone. Par level is the total stock you want on hand to comfortably last until the next delivery arrives, including a safety buffer — it's the target you're ordering up to, not the trigger to order.
Use actual consumption from recent stocktakes or POS-linked recipe data over at least a few weeks, rather than a single busy or quiet week. For items with strong weekday/weekend variation, consider calculating separate par levels for different days rather than one blended average.
Because usage and delivery timing both vary in practice — a busier-than-expected weekend or a delayed delivery can leave you short exactly when demand is highest. Safety stock absorbs that variability without needing to hold a much larger buffer across all your inventory.