1. What is Inventory Accuracy?

Inventory accuracy measures the discrepancy between recorded inventory levels in the system (book inventory) and the actual physical inventory count. It is a critical metric for assessing inventory management effectiveness and identifying potential issues in stock control processes.

2. How Does the Calculator Work?

The calculator uses the inventory accuracy formula:

Where:

• \( \text{Actual Inventory} \) — Physical count of inventory units
• \( \text{Book Inventory} \) — Recorded inventory units in the system
• \( \text{Accuracy} \) — Result expressed as a percentage

Explanation: The formula calculates the percentage match between what the system says should be in stock versus what is actually physically present.

3. Importance of Inventory Accuracy

Details: High inventory accuracy is essential for reliable financial reporting, efficient operations, customer satisfaction, and effective supply chain management. Inaccuracies can lead to stockouts, overstocking, and financial discrepancies.

4. Using the Calculator

Tips: Enter actual physical inventory count and book inventory values in units. Both values must be positive numbers, with book inventory greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good inventory accuracy?
A: Most industries aim for 95% or higher accuracy. Retail typically targets 98-99%, while manufacturing may accept 95-97%.

Q2: What causes inventory inaccuracies?
A: Common causes include theft, damage not recorded, receiving/shipping errors, data entry mistakes, and system synchronization issues.

Q3: How often should inventory accuracy be measured?
A: Regular cycle counting (daily/weekly counts of specific items) combined with periodic full physical inventories provides the best monitoring approach.

Q4: What actions should be taken for low accuracy?
A: Investigate root causes, improve receiving/shipping processes, enhance employee training, implement better inventory control systems, and conduct more frequent counts.

Q5: Can accuracy exceed 100%?
A: Yes, if actual inventory exceeds book inventory, accuracy will be over 100%, indicating potential receiving errors, unrecorded returns, or other discrepancies.