Differentiate between par stock and par level in inventory management.

• A. Par stock is the standard quantity to keep on hand; par level is the reorder point that triggers replenishment.
• B. Par stock is the reorder point; par level is the total stock on hand.
• C. Par stock is the budget for inventory; par level is the maximum.
• D. Par stock is the minimum amount; par level is the ideal number.

Answer: (A)

Par stock is the standard quantity you aim to keep on hand for each item. Par level is the point at which you reorder to replenish and bring stock back up to that standard. In practice, you set a target amount (par stock) and a threshold (par level) that triggers order placement when inventory falls to that level. For example, if onions have a par stock of 20 bags, and you currently have 6, you reorder to bring you back up to 20. The trigger is reaching the par level, not the total on hand or a budget figure. This distinction keeps operations stocked for service while avoiding overstock.