Inventory Shrinkage Rate
2 July 2021
Inventory Shrinkage Rate is a measure of inventory control. It measures the percentage of inventory that is lost between the initial production and the point it is sold. Reasons for shrinkage can include breakages, spillages, misplacements, perished goods, as well as internal and external theft.
Inventory Shrinkage Rate = (IV1 – IV2) / IV1
Where:
IV1 is the inventory you should have according to your records
IV2 is the actual inventory you have
This indicator is included in the book: Key Performance Indicators – the 75+ measures every manager needs to know, which contains an in-depth description of this KPI, as well as practical advice on data collection, calculations, target setting, and actual usage.
Related Articles
Why AI Will Never Truly Understand Your Feelings (And Why That Matters)
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
AI’s Shocking Pivot: From Work Tool To Digital Therapist And Life Coach
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
5 Powerful AI Prompts That Can Boost Any Business Idea
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
5 Game-Changing Quantum Computing Use Cases You Should Know About
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
Amazon Unleashes New AI Agents Ready To Take Over Your Daily Tasks
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
The Critical Quantum Timeline: Where Are We Now And Where Are We Heading?
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
Sign up to Stay in Touch!
Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.
He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.
He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.
Bernard’s latest book is ‘Generative AI in Practice’.
Social Media