Inventory shrinkage is the unaccounted-for reduction in the company's inventory that does not results from theft.
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A. B.B
The statement is true. Inventory shrinkage refers to the loss of inventory items that occurs in the normal course of business due to factors such as breakage, spoilage, mishandling, and errors in counting or recording. It is the difference between the physical count of inventory and the inventory records, and it can arise for a variety of reasons that do not involve theft.
For instance, inventory may shrink because of damage that occurs during transport or storage, or because of the natural deterioration of perishable goods over time. In addition, inventory may be lost or misplaced due to errors in the recording of transactions, or due to the failure to properly track and manage inventory levels.
It is important for companies to identify the causes of inventory shrinkage and take steps to minimize its impact, such as improving inventory management processes, enhancing security measures, and conducting regular physical counts and reconciliations of inventory records. By doing so, companies can help to ensure that their inventory levels are accurate and that they are able to fulfill customer orders and meet demand for their products and services.