# 15 Inventory Shrinkage

**Inventory** **shrinkage** is a percentage expressing how much inventory you are losing. In a bakery, inventory loss is often caused by spoilage, pests, or water or fire damage. If your inventory shrinkage rate is high, you will need to find ways to manage your inventory better and bring your losses down.

Here is the formula you can use to calculate inventory shrinkage:

For inventory shrinkage, you do not need to use dollar amounts. You can simply use stock measurements.

For example, let’s say you have a recorded amount of 200 pounds of flour. However, when you inspect your inventory you find that one 25-pound bag has been water-damaged and needs to be thrown away. Your true inventory is 175 pounds of flour (200 – 25 = 175)

Your inventory shrinkage rate for flour is 12.5%

You can also use dollar amounts. Let’s say your recorded inventory is worth $567.45, but when you check your inventory, you find that it’s actually worth $435.85.

Your inventory shrinkage is 23%

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## Assignment

## Purpose

To practice calculating the inventory shrinkage of a business.

## Outcomes

By completing this assignment, you will be able to…

- Understand what inventory shrinkage is.

- Calculate the inventory shrinkage of given businesses.

## Instructions

To complete this assignment…

- Read the problems carefully and find the correct answers.

- Be sure to show how you set up each problem.

## Tips for Success

To help in the completion of this assignment, make sure to:

- Read each problem carefully and understand what it is asking.
- Include how you set up each problem in order to get credit.
*As in the examples given, you will round the number before multiplying by 100, so the percentage will always be a whole number.*

**Inventory Shrinkage Assignment**

1) Elsa had 150 pounds of sugar on hand. When she inspected her inventory, she found that a 10-pound bag of sugar was damaged and needed to be discarded. What was her inventory shrinkage?

2) Joe had 25 gallons of vegetable oil on hand. When he inspected his inventory, he found that one of the gallon jugs had leaked and needed to be discarded. What was his inventory shrinkage?

3) Keisha had five dozen eggs on hand. When she inspected her inventory, she found that three eggs had gone bad and needed to be discarded. What was her inventory shrinkage?

4) Salman had 12 pounds of butter on hand. When he inspected his inventory, he found that 1.75 pounds of butter had spoiled and needed to be discarded. What was his inventory shrinkage?

5) Marta had five pounds of powdered sugar on hand. When she inspected her inventory, she found that 0.5 pound of sugar had gotten wet and needed to be discarded. What was her inventory shrinkage?

6) Jeremiah had six pounds of raisins on hand. When he inspected his inventory, he found that ants had gotten into three pounds of raisins and these raisins needed to be thrown away. What was his inventory shrinkage?

7) Lepishoi had 22 ounces of fresh blueberries on hand. When she inspected her inventory, she found she needed to cull out 3.5 ounces of blueberries that had spoiled. What was her inventory shrinkage?

8) Poonama had nine equal-sized boxes of corn starch on hand. When he inspected his inventory, he found that one box had gotten wet and needed to be discarded. What was his inventory shrinkage?

9) Blanca had 25 pounds of cornmeal on hand. When she inspected her inventory, she found that five pounds had been damaged and needed to be discarded. What was her inventory shrinkage?

10) Wai had 48 ounces of baking soda on hand. When he inspected his inventory, he found that three ounces had gotten wet and needed to be discarded. What was his inventory shrinkage?

11) If the recorded inventory is $2,593.23, but after inspection the actual inventory is worth $2,319.20, what is the inventory shrinkage?

12) If the recorded inventory is $1,237.09, but after inspection the actual inventory is worth $1,120.13, what is the inventory shrinkage?

13) If the recorded inventory is $928.36, but after inspection the actual inventory is worth $911.02, what is the inventory shrinkage?

14) If the recorded inventory is $979.89, but after inspection the actual inventory is worth $899.67, what is the inventory shrinkage?

15) If the recorded inventory is $1,029.35, but after inspection the actual inventory is worth $958.43, what is the inventory shrinkage?

16) If the recorded inventory is $1,139.46, but after inspection the actual inventory is worth $936.15, what is the inventory shrinkage?

17) If the recorded inventory is $1,658.23, but after inspection the actual inventory is worth $1,532.48, what is the inventory shrinkage?

18) If the recorded inventory is $897.80, but after inspection the actual inventory is $846.12, what is the inventory shrinkage?

19) If the recorded inventory is $1,795.34, but after inspection the actual inventory is $1,283.47, what is the inventory shrinkage?

20) If the recorded inventory is $1,329.39, but after inspection the actual inventory is $1,310.88, what is the inventory shrinkage?