Cause of Negative Inventory in a Retail Store

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Negative inventory in a retail store occurs when the recorded quantity of a product is less than the actual physical count. This discrepancy can arise due to various reasons:

  1. System Errors: Glitches or bugs in inventory management software can lead to incorrect recording of stock levels.

  2. Employee Errors: Manual errors, such as miscounting during receiving or picking, can result in negative inventory.

  3. Theft or Fraud: Theft by employees or customers can lead to discrepancies in inventory levels.

  4. Returns and Exchanges: If returns or exchanges are not properly recorded, it can lead to negative inventory.

  5. Supplier Errors: Inaccurate shipments or data entry errors by suppliers can also cause negative inventory.


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