Which statement best describes par stock in inventory management?

Which statement best describes par stock in inventory management?

• A. The minimum quantity of each item kept on hand to meet expected needs
• B. A target stock level that triggers a new order
• C. The average daily usage rate
• D. A surplus below safety stock

Answer: (A)

Par stock is the minimum quantity you want to have on hand to cover expected demand before the next delivery arrives. Keeping this baseline ensures you don’t run out during lead time and normal usage. When actual inventory reaches this par level, you place an order to bring stock back up to the planned amount, rather than waiting for a higher trigger. This concept is distinct from the reorder point (which is the specific trigger to order) and from the average daily usage (which measures consumption rate). It’s also not describing a surplus below safety stock, which would imply a buffer that isn’t the basic par level.

Par stock is the minimum quantity you want to have on hand to cover expected demand before the next delivery arrives. Keeping this baseline ensures you don’t run out during lead time and normal usage. When actual inventory reaches this par level, you place an order to bring stock back up to the planned amount, rather than waiting for a higher trigger. This concept is distinct from the reorder point (which is the specific trigger to order) and from the average daily usage (which measures consumption rate). It’s also not describing a surplus below safety stock, which would imply a buffer that isn’t the basic par level.