define the difference between cycle counting and physical
inventory?
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Answer / santosh s. pandey
Cycle Count : Periodic counting of inventory items at
regular intervals
Physical Inventory : Counting is done once / twice a year
Cycle Count : We can schedule the count
Physical Inventory : We cannot schedule this.
Cycle Count : We cannot have a snap shot
Physical Inventory : We can have a snap shot
Cycle Count : We can view the qty in the system
Physical Inventory : We can not view the qty in system
Cycle Count : We cane select the items using ABC analysis.
Physical Inventory : It is done for all the items.
Cycle Count : We need not to freeze inventory transactions.
Physical Inventory : Need to freeze inventory transactions.
Cycle Count : Recount is possible
Physical Inventory : Recount is not possible.
Cycle Count : We can maintain recount history.
Physical Inventory : No recount, hence no history.
Cycle Count : Adjustments can be procesed on approval.
Physical Inventory : Can be done using adjustment concurrent
| Is This Answer Correct ? | 54 Yes | 1 No |
Answer / srinivas k
cycle counting can counting on specific items.
But in physical inventory we has to count all items.
| Is This Answer Correct ? | 47 Yes | 7 No |
Answer / john gellert
A physical inventory is done once a year to check and
correct the accuracy of your inventory. Often used by
banks to audit their investment into your company or to
simply reset your stock levels so that inventory is correct
and customer service is not impacted by wrong information.
A cycle counts purpose is to find systemic problems, it is
NOT intended to ensure your inventory accuracy or fix your
on hand quantities. Those are mere bi-products of a cycle
count.
All inventories will have different classification of
products called A,B,C,D classification. These classes are
defined by the criticalness and movement of a product where
an A item is high dollar / high mover, and a D item is
something that is identified by the dust it has on the
shelf.
A cycle count filters through your inventory over a course
of a year. A company may choose to count all their A items
4 times a year, B items 3 times a year, C items twice, and
D once.
The theory behind the Cycle Count is to monitor your
systems (processes and proceedures). Are you pulling parts
correctly, are they marked correctly, is paperwork being
processed, is the receiving dept. counting items on the
inbound, are product bar coded correctly, is a bill of
material correct, theft, and a hundred other things that
could possibly cause your inventory to go out of balance.
A cycle count finds those flaws and offers you a chance to
correct them.
The reason an A item is counted more often than a D is not
because of Value $$, yet because it is subjected to your
processes a lot more. Assuming you have a very solid
system/process, you constantly test it (via Cycle Counts),
and you apply that same exact process to an A item as you
do a D, there is a very high probablility that your
inventory accuracy on the D item will be as accurate as
your A, even though you only counted it once in a years
span.
Lastly, a good cycle count has a Hit of Miss criteria.
There are always going to be acceptable levels of
tolerance. Simply put, do we really care if we are off by
1 or 2 pcs. of a $0.01 part that we stock THOUSANDS of?
NO! So we identify those tolerances. If your counts fall
with in those tolerances, you have a HIT (good thing). IF
they fall outside of the tolerance you have a MISS (bad
thing).
Misses are investigated. Problems researched and solutions
secured. THEN as a final measure you would schedule the
MISS for a future cycle count, say in a couple of weeks to
ensure the fix worked, the process is functioning and the
system is good.
Hope this helps.
| Is This Answer Correct ? | 18 Yes | 1 No |
Answer / anuj tyagu
(1)Cycle counting is the periodic counting of individual
items throughout the course of the year toensure the
accuracy of item.
Physical Inv. counts all the inventory once a year Physical
Inv. takes a snapshot of inv.'s on-hand quantity at the
begining of th e process. All adjust ments are made against
snapshot quantity.
(2)In cycle counting fewer items are counted each day so
less disruption to normal production or distribution
In PI all items are conted once a year so alot of
disruption
(3)In CC you need to use a miscellenious transaction to
report 'found material.
In PI unique tag generation is done for recording counts
| Is This Answer Correct ? | 14 Yes | 7 No |
Answer / deepu
CYCLECOUNT DONE IN INVENTORY ONE OR MORE TIME IN AYEAR
PHYSCICAL INVENTORY DONE ONCE AYEAR
| Is This Answer Correct ? | 23 Yes | 22 No |
Answer / vijay
Basic idea behind conducting Stock Count thru Cycle Count (CC)or Physical Inventory (PI) remains the same of streamlining your inventory. Now it is not mandatory to conduct the CC or PI yearly once or once in six months or 3 months so on and so forth, this is purely the decision of the business (client).
Conducting the stock count process remains same in CC or PI on a broader level.Both processes;
1.select the items for the count
2.system snapshot
3.printing report of system snapshot without item qty
4.entering physical stock qty
5.printing report for the qty variation between physical and system qty
6.recounting the item quantities in case of variation above tolerance level (optional)
7.approving the qty varaitions
8.posting the adjustment with appropriate transaction type and transaction account
Differences in CC and PI:
CC - It is stock count method where you select item or list of items which have to be counted.Now you can select the items either by manually selecting for each CC or by creating item groups using ABC analysis. By performing ABC Analysis you group the items and perform the CC for each group or collectively.You execute the CC programs and take the system snapshot as on date. Later you either manually enter the physical qty or import the physical qty using interface program.
PI - It is stock count method where you select items in an inventory org or subinventory/subinventories. Then you execute the generate tags program to create unique tag no. for each item in the list and subsequently take system snapshot. Then you manually enter the physical qty against each item and find the variance and finally pass the adjustment on approval.
| Is This Answer Correct ? | 5 Yes | 4 No |
Cycle Counting: It is the periodic Counting like we can perform counting no.of times in a year
Physical Counting: Perform counting per year one or twice
Cycle Counting: we are performing counting for maximum regular purpose
Physical Counting: we are performing counting for Auditing purpose
Cycle Counting: snapshots is not applicable
Physical Counting: Snapshots is applicable
Cycle Counting: Transaction are not Freeze
Physical Counting: Transaction are Freeze
Cycle Counting: Tags are not applicable
Physical Counting: Tags are applicable
Cycle Counting: ABC Analysis is required
Physical Counting: ABC Analysis is not required
Cycle Counting: Recounting Is Applicable
Physical Counting: Recounting is not Applicable
Cycle Counting: Automatically performing the Adjustment
Physical Counting: Manual performing the Adjustment
| Is This Answer Correct ? | 1 Yes | 0 No |
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