What inventory method involves bringing stock up to par level every time an order is placed?

The par stock inventory method is grounded in maintaining a predetermined level of inventory specifically referred to as the par level. This approach involves restocking items to this designated level every time an order is placed, ensuring that there is always an adequate supply on hand to meet demand. This systematic replenishment strategy helps to minimize the risks of stockouts and ensures operational efficiency by aligning inventory with anticipated needs.

In contrast, the perpetual inventory method continuously tracks inventory levels in real-time, updating as purchases and sales occur, rather than relying on set par levels. The min-max inventory method establishes minimum and maximum inventory thresholds, distributing stock based on these ranges rather than simply bringing items up to par levels each time. The fixed order quantity method determines a consistent order amount to replenish stock, independent of the par levels, focusing instead on maintaining stability in order quantities, not necessarily aligning with restocking to a defined level. Thus, the par stock method’s distinct characteristic of consistently returning to a set level with each order makes it the most accurate answer in this context.