Inventory Shrinkage Calculator
The inventory shrinkage calculator compares recorded inventory with a physical count and estimates shortage percentage and cost at a supplied unit cost.
How to use this calculator
- Enter the recorded quantity, counted quantity and unit cost. Positive overages are reported separately from shrinkage.
- Check the units and definitions before comparing results with another source.
- Change one input at a time when comparing scenarios, and keep the reporting period and assumptions consistent.
Formula used by the inventory shrinkage calculator
Shrinkage units = max(recorded − counted, 0); shrinkage rate = shrinkage units ÷ recorded units × 100%
- Shrinkage units = max(recorded − counted, 0); shrinkage rate = shrinkage units ÷ recorded units × 100%
- This estimates a quantity variance. It cannot determine whether the variance came from damage, theft, recording errors, timing or supplier differences.
- Inputs are checked for required values and valid ranges; displayed results are rounded for readability.
Worked examples
Worked example
Records show 500 units, the count finds 485 and unit cost is 4.50.
The shortage is 15 units, the shrinkage rate is 3% and estimated shortage cost is 67.50.
The shortage is 15 units, the shrinkage rate is 3% and estimated shortage cost is 67.50.
Understanding the result
The inventory shrinkage calculator compares recorded inventory with a physical count and estimates shortage percentage and cost at a supplied unit cost.
This estimates a quantity variance. It cannot determine whether the variance came from damage, theft, recording errors, timing or supplier differences.
Important notes
This estimates a quantity variance. It cannot determine whether the variance came from damage, theft, recording errors, timing or supplier differences.
The result applies to the numbers and assumptions entered here; verify specifications for safety-critical or regulated uses.
Frequently asked questions
What if the count is higher than the record?
The tool reports an overage rather than negative shrinkage.
Does shortage cost equal lost retail revenue?
No. This output uses the unit cost supplied, not a retail selling price or total business impact.
How do I use this calculator?
Enter the recorded quantity, counted quantity and unit cost. Positive overages are reported separately from shrinkage.
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Related explanations
Learn the method behind the number or compare the terminology before using the calculator.
- How to Calculate Percent Error — Learn the percent error formula and how to compare an experimental value with a reference or accepted value.
- CAGR Explained: Compound Annual Growth Rate — Learn the CAGR formula and how to use it to compare growth over multiple years.
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This page provides a calculation tool plus explanatory information so you can understand what the result means and when the underlying method may not fit your situation.