Cycle counting is a method of checks and balances by which companies confirm physical inventory counts match their inventory records.
There are three main types of cycle counting:
- ABC analysis cycle counting.
- Process control group cycle counting.
- Opportunity based cycle counting.
- ABC analysis cycle counting:
In ABC cycle counting , high volume, more valuable, fastest moving inventory are counted more often than your low volume inventories.
2. Process control group cycle counting:
Small group of products are counted and recounted by different employees in short time frame.
3. Opportunity based cycle counting:
Counting inventory based on opportunity, like when an item is ordered or stored.
Advantages of cycle counting :
It is an efficient and cost – effective way to ensure the ongoing accuracy of your inventory counts and valuation.
- Fewer error
- High sales
- High order fulfillment
- Better customer service levels
- More accurate inventory assessments