MANAGEMENT

Detailed explanation-1: -In some cases, you might have inventory shrinkage because of malicious actions, such as theft, shoplifting, or fraud. Vendors may commit fraud and give you less inventory than what you purchased. Or, employees might steal inventory. Shrinkage is also common when customers shoplift from your business.

Detailed explanation-2: -Shrinkage is the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative error, vendor fraud, damage, and cashier error. Shrinkage is the difference between recorded inventory on a company’s balance sheet and its actual inventory.

Detailed explanation-3: -The Main Causes There are four main causes of shrinkage: shoplifting, employee theft, administrative errors, and fraud. Understanding how shrinkage happens in retail stores is the first step in reducing and preventing it.

Detailed explanation-4: -Inventory shrinkage is the excess amount of inventory listed in the accounting records, but which no longer exists in the actual inventory. Excessive shrinkage levels can indicate problems with inventory theft, damage, miscounting, incorrect units of measure, evaporation, or similar issues.

Detailed explanation-5: -An inventory loss occurs when an item is intended for sale is not sold. Losses can happen for a number of reasons. Sometimes stock becomes obsolete or outdated before it is sold. For example, unused food in a restaurant may spoil. This is often referred to as wastage.