While fraud may be your first thought when a business files aninventory loss claim, it isn't always the culprit behind missingitems.
Complex production processes, varied accounting methods and thesheer volume of items make it difficult to measure inventoryaccurately. As a result, many companies experience inventoryshrinkage, or a discrepancy between recorded inventory and actualinventory.
One common reason behind inventory shortages is miscalculatingthe amount of inventory used. For example, an ice cream shop mightthink it can dip 100 cones in a can of chocolate, but it actuallygot 95 cones out of the last can and 85 from the one before that.Unless the shop keeps historical data on its chocolate usage, itsinventory count likely won't be accurate.
Continue Reading for Free
Register and gain access to:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
