Goods that disappear between point of production and point of sale due to theft, damage, expiry or administrative errors.
What is Shrinkage?
John Spacey, updated on December 04, 2016
Shrinkage is a supply chain term for theft or loss of merchandise between point of manufacturer or acquisition and point of sale. It is a global occurrence with average rates typically between 1% and 2% of goods that never reach their destination, depending on region. As such, it represents a significant global cost. Studies suggest that most shrinkage is due to theft. Other factors include administrative errors, damage in transit and expiry of perishable goods.
Business CostsThis is the complete list of articles we have written about business costs.
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A list of common types of business cost.
A principle of financial accounting.A list of common types of business cost.
A definition of cost escalation with an example.
Common examples of cost reduction.
The common types of cost estimate.A definition of relevant cost with examples.
Detailed examples of how to map out the cost structure of a business.
The definition of cost competition with examples.
An overview of cost goals with examples.A list of common business risks. The four things that can be done about risk. A list of techniques for reducing risk. The potential that you'll achieve too much of a good thing.
Any risk that people have a strong aversion too.
The surprising similarities between risk and opportunity.
The difference between risk management and contingency planning.The common types of uncertainty in decision making and strategy.
The common types of inventory risk.
An overview of common business risk management techniques.
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