shrinkage

Definition

Inventory recorded on a company's books but not on hand, due to theft, loss or accounting error.

Use shrinkage in a sentence

The shrinkage experienced by the warehouse was both substantial and unexpected as we did not realized the theft had occurred.

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The production department has tried to work with an efficiency consultant to try and determine areas to improve processes and reduce shrinkage.

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The looters in Detroit provided huge headaches for business owners, who will now have to account for shrinkage from all the lost and damaged good.

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shrink inventory cost