CYCLE COUNTING.

Abstract

The paper discusses implementation and details of a cycle counting system at a manufacturing plant, where material control and standard cost systems could no longer tolerate a once-a-year audit and update of inventory records with all the latent problems created by physical count errors produced by the annual inventory. Cycle counting, the continuous counting of inventory through the year, was required to eliminate the pitfalls of the annual inventory. Among the advantages cited for cycle counting are elimination of the physical inventory, timely identification of records errors enabling correction of the error cause, provide a current measure of inventory record accuracy, produce valid material requirements planning output, less obsolete inventory, less excess inventory, and others.