Feb 21, 2014

What is 'Cycle Counting'?

Today's question is:

What is Cycle Count? How is it different from 'Physical Count?'

Cycle counting is the process of regularly taking the count of items in your inventory. As the name suggests Cycle Counting is done in a 'Cycle', at regular intervals, mostly every month.

One of  the prerequisites of Cycle Counting is ABC Analysis. In ABC Analysis, the items in your inventory are categorized based on their Value. A Category Items are the most valuable in your organization and has to be tracked very regularly. B Category Items are less valuable and need not be tracked at the same frequency as A. C Category items are the lowest in value and are not tracked at all.

In Cycle Counting, the A Category items are counted every month and the adjustments are made in the system to account for the differences.

Physical counting is done mostly once a year and counts both A Category and B Category Items.

Any Questions?

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