Which process ensures that physical stock discrepancies are identified and addressed?

Which process ensures that physical stock discrepancies are identified and addressed?

• A. Demand forecasting
• B. Supplier negotiation
• C. Inventory reconciliation
• D. Reconciliation of physical inventory with system records to identify discrepancies

Answer: (D)

The main idea is keeping stock data accurate by directly comparing what you have on hand to what the system says you should have. This reconciliation of physical inventory with system records identifies any variances, and it is the step that prompts investigation, correction of records, and changes to processes to prevent recurrence. Regular counts or cycle counts feed this process, and when a mismatch appears you trace it to possible counting errors, data entry mistakes, damaged items, receiving or shipping errors, or even theft. By correcting the records and addressing the root causes, you maintain accurate inventory valuation, improve planning, and reduce stockouts or overages. Demand forecasting looks ahead to future demand rather than current stock accuracy, and supplier negotiation focuses on terms with vendors rather than inventory data integrity. The concept of inventory reconciliation is important, but the description here explicitly ties the physical-versus-system comparison to identifying discrepancies and taking corrective action, making it the best fit.

The main idea is keeping stock data accurate by directly comparing what you have on hand to what the system says you should have. This reconciliation of physical inventory with system records identifies any variances, and it is the step that prompts investigation, correction of records, and changes to processes to prevent recurrence. Regular counts or cycle counts feed this process, and when a mismatch appears you trace it to possible counting errors, data entry mistakes, damaged items, receiving or shipping errors, or even theft. By correcting the records and addressing the root causes, you maintain accurate inventory valuation, improve planning, and reduce stockouts or overages.

Demand forecasting looks ahead to future demand rather than current stock accuracy, and supplier negotiation focuses on terms with vendors rather than inventory data integrity. The concept of inventory reconciliation is important, but the description here explicitly ties the physical-versus-system comparison to identifying discrepancies and taking corrective action, making it the best fit.