How does a supermarket check its inventory
How To Find Out Your Inventory Par Level
Your Food Costs and Restaurant Inventory Par Levels are directly related to each other.
As a restaurant owner, trying to control everything that is going on in your home is a challenge.
You need to make sure that you have enough inventory to meet consumer demand every week, while also avoiding over-ordering as you don't run into waste or inventory
Monitoring your inventory and its par levels is the key to a successful and profitable restaurant.
Lower levels have the following advantages for your restaurant
1. Reduces food spoilage
Every item in your inventory has a fixed shelf life. As this period goes by, they start to get putrid or they have expired. When your inventory is low, you need to go through all of the items with no food spoiled or expired.
2. Reduces food waste
When stocks are low, all of the ingredients in your inventory will be used to the full and this will ensure that no food is wasted during the week.
3. Keeps your inventory turnover rate under control
A healthy inventory turnover rate is what keeps your inventory stable and in check. Having lower inventory levels helps you maintain a constant inventory turnover rate, which means your restaurant is doing well and you are not wasting money on unnecessary groceries or ingredients.
What are Restaurant Inventory Par Levels?
So what does par mean for a restaurant?
You've probably heard of pars in golf, but maybe not so much in relation to restaurant inventory levels.
Both concepts are similar. A par level restaurant's inventory is the minimum amount of all the ingredients that you expect to be in your inventory at any given time.
It is also the minimum amount of ingredients that will meet demand in your restaurant, while also providing a little extra supply in case unexpected demand occurs (also known as safety stock).
You should always set realistic par levels for your restaurant inventory to save money and avoid food waste. Whenever your inventory drops below these levels, you should place an order to replenish that particular item. Par levels will help you keep your inventory in order and will help you keep your restaurant running smoothly.
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How to Calculate Your Restaurant Stock Par Level
To calculate your par levels for each ingredient in your inventory, you first need to find a few things about your restaurant, such as
- What are the delivery schedules for each item in your inventory?
- What is the customer demand for each item in your inventory? (This can be found in your sales reports)
- What is your average inventory?
- What is the inventory turnover rate for each item?
Although everyone has their own way of calculating par levels, there is a general formula you can use that is as follows
Inventory par level = (Amount of inventory used per week + safety stock) / number of deliveries per week
Let's say you go through 20 cases of beer every week in your restaurant and you get 2 deliveries in a week. We assume 4 cases as a safety stock, which is 20% of the normal stock. The par level for beer in your restaurant is calculated as follows
(20 cases + 4 cases) / 2 = 12 cases
So, the par level for beer in your restaurant for this example would be 12 cases. This is the minimum number of cases that you should always have in your inventory.
Each food item has different safety levels, but as a general rule of thumb, 20% - 30% of weekly use can be identified as safety levels. This factor allows any unexpected demand during the week. For an accurate estimate, you should check your inventory turnover rate and sales reports to avoid inventory or food waste.
The question sometimes arises, when can inventory exceed the set par levels?
There are a few cases where it is perfectly normal (sometimes even recommended) to have your inventory past the set par levels. These cases are
- Holidays, festivals and events Thanksgiving, July 4th, Valentine's Day, Easter, Christmas, etc.
- Delivery problems have to carry your inventory in excess if there is a natural disaster, vacation or weekends. In the event of these events, you need to be well prepared as there will be some problems with the delivery of groceries.
To assist with inventory management, you can use dedicated software applications that provide detailed inventory usage and sales reports that would help you set par levels for each ingredient in your inventory.
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