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Par Level Inventory: What It Is and How to Set It

October 14, 2019
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XuanThy Nguyen
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In bar inventory management, the par level is the minimum amount of a product that you should have on hand at all times to make sure you don't run our or have loads of useless sitting inventory. Par levels change based on your business’s needs, day of the week, season, time of the day, major holidays, and special events.

Generally, par inventory levels should be updated at least twice per year, during the busy season and the slow season, but doing so more often can only help. That's why we recommend taking beverage inventory frequently.

How to Set Par Levels for Your Bar

To calculate and set the par levels for your bar, follow these steps:

Step 1: Look At Your Historical Usage

To accurately set the par level for an item, examine the historical usage of that item over a certain period. For example, in setting the par level for a certain vodka bottle, look at your bar’s past usage and note that you used 400 vodka bottles over a period of 3 months, or 13 weeks.

Step 2: Calculate Your Average Weekly Usage

By dividing the total number of bottles used in a period of time over the number of weeks in that period, you'll get the number of bottles that your bar uses per week. In our example, 400 vodka bottles divided by 13 weeks, we get 30 bottles per week.

Step 3: Consider All Possible Factors

In order to accurately set the par level for your bar, it is important to keep in mind all possible factors that might affect your bar’s usage and account for them in your data. In our example, your historical usage shows that Bloody Marys are a popular choice for guests in October because of the spooky season. During this time, your usage of vodka bottles increases by 50%. Simply multiply your initial data by 1.5 to get the estimated number for this busy time: 30 times 1.5 equals 45 bottles per week.

Step 4: Set Your Goal

The final step is to determine your target weeks of inventory to stock up for your bar. We recommend calculating for a 2-week period to avoid overstocking, but your business’s needs may vary.For a 2-week target par during the spooky season, use your data adjusted for seasonality and multiply it by 2 weeks of inventory. With our example, you'll get 90 after multiplying 45 by 2, and that is your par level for vodka bottles. That means that, during October, you should always have at least 45 bottles of this vodka on your shelf.

How to Scale Setting Your Par Inventory

This sounds quick and easy when you only have to do it for one bottle, but what happens when your bar carries more than a thousand different bottles? Not only that, but your bar’s par level inventory actually changes more frequently than you think. For example, during Thanksgiving and Christmas, you might find your bar’s usage of every wine bottle increases significantly, while the canned beer usage decreases by 50%. This means you will need to make a lot of adjustments to your par levels. And doing this manually is extremely time-consuming and is prone to mistakes that might result in either overstocking or under-stocking.

Bar inventory management isn’t easy and your time is precious. This is where BinWise Pro comes in to make your job easier. The platform allows you to quickly set and adjust the par level inventory for all your bottles, as well as make recommendations based on historical usage. What’s more, BinWise alerts you when your inventory is falling below the par levels and enables you to place orders directly to your distributors right through the platform.

With BinWise Pro as your technology partner, you can completely say goodbye to paper and pen, manual counting, and mistakes. Book a demo!