IDENTIFYING LIQUID INVENTORY RELATED HOLESIN RETAIL SECTOR – A REVIEW

摘要

In accounting terminology cash is termed as liquid asset and stock of items stored, called inventory ofitems. Inventory of items kept for sale are considered almost as liquid as cash because it requires a singletransaction by a seller to sell it to a buyer for cash. Since items stored in retail outlets are as good as cash,therefore, some people (Customers, employees, or other groups) are tempted to steal it for their personaluse or for sale without making a legal transaction.The absence of legal transaction, gives the impression to management that items are physically available instore for sale. However, actual inventory verification at the end of a year may actually show shrinkage(Loss) in inventory. Loss of one unit of item from stock needs profit from the sale of many to recover it. Inother words the shrinkage of inventory from the retail outlets causes huge cost to retailers and it may causebankruptcy of a retail outlet.This paper is an outcome of an on-going research project, designed to identify leakage points and topropose policies and operational procedures to prevent or minimize the leakage of liquid assets from aretail outlet. Due to the constraint of space, this paper is designed to focus on the identification of holes bysurveying the current literature on shrinkage of stocks in retail industry. Identification of the holes inoperational procedures and practices may be helpful in designing or plugging the retail processes to savebillions of dollars to retail industry. The next stage of this project is to look into the operational mechanismof a case study (Retail outlet) to see how far the findings of literature survey are applicable to the casestudy store. In the end, this research project will help us to find ways to plug the holes to stop or minimizethe loss of inventory.