Retail & E-commerce / Operations
Shrinkage shrink
The stock the books say you have but the shelf does not, lost to theft, damage, and error.
The fork, why two teams get different numbers
Shrink is measured at RETAIL or at COST, and quoted as a percent of SALES or a percent of INVENTORY, four combinations, all called "shrink." Loss-prevention and the industry benchmark quote shrink at retail as a percent of net sales; finance often wants it at cost.
In the Metric Library
- The full fork, both definitions worked all the way through
- The trap that makes the number lie, on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: Retail loss-prevention convention · ASC 330 inventory (reference)