Par levels for a cafe: why the textbook formula runs out on Sunday

The usual formula for par levels divides a week of stock, plus a safety margin, by the number of deliveries. It quietly assumes each delivery covers the same share of the week. A cafe's week is not that even, so the formula runs short at the weekend and over-orders early in the week.

The par levels formula

MarketMan and Sculpture Hospitality both give it as weekly use plus safety stock, divided by deliveries per week. MarketMan's example is 14 cases of red wine a week plus 3 cases of safety stock over 2 deliveries, for a par of 8.5 cases. For safety stock, MarketMan suggests around 20 to 30% of weekly use, and Sculpture Hospitality around 25%.

To order, count what is on hand and order the difference up to par.

Where it goes wrong: milk

A cafe uses 18 litres of milk on Monday, 18 on Tuesday, 20 on Wednesday, 20 on Thursday, 26 on Friday, 34 on Saturday and 32 on Sunday. That is 168 litres a week, delivered on Monday and Thursday mornings.

The formula takes 168 litres, adds 25% safety stock of 42 litres, and divides by 2 deliveries. The par is 105 litres at each delivery.

• Topped up to 105 litres on Thursday, the fridge holds 85 litres after Thursday, 59 after Friday and 25 after Saturday. Sunday needs 32. The cafe runs 7 litres short on its second busiest day.
• Topped up to 105 litres on Monday, 49 litres are still sitting in the fridge when Thursday's delivery arrives.

The formula did what it says. It answered the question for an even week, and this cafe does not have one.

Set a par for each delivery

Size each delivery to the days it has to last until the next one:

• Monday's delivery covers Monday to Wednesday: 56 litres. With 25% safety stock, its par is 70 litres.
• Thursday's delivery covers Thursday to Sunday: 112 litres. With 25% safety stock, its par is 140 litres.

The two pars add up to the same 210 litres the formula works with. The stock simply arrives when it is needed. With 12 litres on hand on Monday morning, the order is 58 litres.

Adding a third delivery

A Saturday top-up changes the sums. Thursday's delivery then only has to cover Thursday and Friday, 46 litres, for a par of 57.5 litres. Saturday's delivery covers the weekend's 66 litres, for a par of 82.5 litres. Monday stays at 70. Less milk sits in the fridge between deliveries, in exchange for one more order to place each week.

When a delivery runs late

If Thursday's delivery arrives on Friday, Monday's stock has to last a day longer than its par allowed for. Base each delivery's par on the longest gap your supplier actually delivers to, not the gap on the timetable.

Check par against shelf life

Safety stock that spoils before it is used is waste paid for in advance. For short life items, keep each delivery's par close to what the days until the next delivery will actually use, and keep the margin small.

Items that do not need a par

Par levels suit steady staples: milk, bread, eggs, coffee. A slow item bought once a month, such as a specialty tea, is easier to order by count and date. An expensive item that spoils fast is better ordered against the bookings and trade you expect for those days.

Keep par levels current

Par levels are only as good as the usage figures they are built from. Rebuild them from sales and stock counts when the menu changes, when trade shifts with the season, and after any week you ran out or threw stock away. MarketMan's advice is to review inventory turnover and sales reports when setting them, which is the same data this cafe's milk figures came from.