Answer Posted / muthur
Cycle counting is the periodic counting of individual items
in your inventory throughout the year based on their
ranging.
Count items of higher value more frequently than items of
lower value.
You can perform cycle counting instead of performing
physical inventory, or your can use both techniques to
verify the accuracy of on-hand quantities and values.
Cycle Count is divided into two primary functions: ABC
Analysis and
Defining a Cycle Count.
ABC Analysis:
ABC analysis is a method of determining the value of items
in your inventory, ranking your items according to a
criterion and then grouping items into classes. "ABC"
refers to the rankings you assign your items as a result of
this analysis, where "A" items are more valuable than "B"
items and so on.
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