Shrinkage Analysis

Shrinkage analysis is a method used to examine the difference between expected and actual outcomes in various fields, such as retail or finance. It helps identify gaps, such as products that are lost, stolen, or not selling as anticipated. By analyzing these discrepancies, businesses can determine the causes of shrinkage—whether through theft, errors, or inventory mismanagement—and implement strategies to minimize losses. Essentially, it helps organizations understand why they’re not achieving expected results and guides improvements for better efficiency and profitability.