Measure stock lost to theft, damage and error as a share of sales, the standard shrinkage metric.
The shrinkage rate is the share of total sales at cost that value of stock unaccounted for represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small. Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where lower is better.
Inventory Shrinkage
Shrinkage Rate = Value of stock unaccounted for ÷ Total sales at cost × 100
Shrinkage Rate = Value of stock unaccounted for ÷ Total sales at cost × 100 The shrinkage rate is the share of total sales at cost that value of stock unaccounted for represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small.
Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where lower is better.
This calculator takes 2 inputs: Value of stock unaccounted for, Total sales at cost. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.