Abnormal (Inventory) Shrinkage - Definition
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What is Abnormal Shrinkage?
Inventory shrinkage, or contraction, is used to describe inventory loss. For instance, if a retailer's inventory records report that there are 3,261 units of Product X available, but a physical count shows that only 3,248 are available, then an inventory shrinkage of 13 units exists.
A Little More on What is Abnormal (Inventory) Shrinkage
Inventory shrinkiage may occur for any number of reasons, including poor manufacturing quality (disposal), loss during transportation, and theft.
Academic Research for Abnormal Shrinkage
- Bullwhip effect and supply chain costs with low-and high-quality information on inventory shrinkage, Dai, H., Li, J., Yan, N., & Zhou, W. (2016). European Journal of Operational Research, 250(2), 457-469.
- Comparing improvement strategies for inventory inaccuracy in a two-echelon supply chain, Xu, J., Jiang, W., Feng, G., & Tian, J. (2012). European Journal of Operational Research, 221(1), 213-221.
- Inventory management shrinkage and employee anti-theft approaches, Smith, A. D., Smith, A. A., & Baker, D. L. (2011). International Journal of Electronic Finance, 5(3), 209-234.
- Corporate fraud: The basics of prevention and detection, Bologna, J. (1984).
- Can wages buy honesty? The relationship between relative wages and employee theft, Chen, C. X., & Sandino, T. (2012). Journal of Accounting Research, 50(4), 967-1000.
- Inventory management in pharmacy practice: a review of literature, Ali, A. K. (2011). Archives of pharmacy practice, 2(4), 151. Implementing an effective inventory management system, Harrington, T. C., Lambert, D. M., & Vance, M. P. (1990). International Journal of Physical Distribution & Logistics Management, 20(9), 17-23.
- Optimal ordering policy of a risk-averse retailer subject to inventory inaccuracy, Zhu, L., Hong, K. S., & Lee, C. (2013). Mathematical Problems in Engineering, 2013.
- Exploring inventory systems sensitive to shrinkageanalysis of a periodic review inventory under a service level constraint, Rekik, Y., & Sahin, E. (2012). International Journal of Strategic value of RFID in supply chain management, Tajima, M. (2007). Journal of purchasing and supply management, 13(4), 261-273.