Inventory shortage, also known as shrinkage, refers to the unexplained difference between the physical count of inventory and the amount recorded in accounting records. This discrepancy can be due to various factors, ranging from normal evaporation of a liquid to theft.
Merchandise Control involves the systematic process of collecting and evaluating data on all aspects of each retail merchandise category, including sales, costs, shrinkage, profits, and turnover. This process helps retailers maintain accurate inventory and optimize their merchandising strategies.
Normal loss refers to the predictable and usual loss of materials in a manufacturing or chemical process due to factors like waste, seepage, shrinkage, or spoilage. These losses are considered a standard part of the production process and are accounted for in manufacturing costs.
Shrinkage refers to the difference between the actual physical inventory and the amount that should be on hand according to the book inventory, as well as weight loss experienced in various contexts such as natural grain drying and commodity processing.
