Inventory Shrinkage

Description of Inventory Shrinkage. Explanation.

Definition Inventory Shrinkage. Description.

Inventory Shrinkage is the difference between the booked inventory a company should have as a result of its sales, purchasing and manufacturing processes and the  actual inventory it has on hand. It is an unplanned and unwanted loss of inventory.

Major sources of shrinkage include:

• Theft by employees (shoplifting) or customers.

• Inventory counting errors.

• Accounting errors.

• Fraud.

• Loss and damage.

• Perishability, detoriation.

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End of description Inventory Shrinkage. An explanation.