green check markSolved by verified expert Cycle counting is a procedure in inventory audit that involves counting a section of the inventory on a specified day. It is aimed at ensuring that the inventory records are accurate. Unlike in a physical count where all items in the inventory are counted, cycle counting is performed on a subset of the inventory. The subsets are often item categories. Businesses undertake cycle counts since they are less disruptive compared to physical counts. It is easier to count a small portion rather than the whole volume of the inventory. There are three types of cycle counts. First is the ABC analysis cycle counting that promotes more regular counts for products that rank higher than others according to their usefulness in achieving the business's objectives. Second is the process control cycle counting where cycle counts are undertaken once discrepancies are observed in inventory records. Lastly, there is the opportunity cycle counting where counting is undertaken in critical points in the inventory management. Such points include when items have been reordered, stowed or have gone below predetermined thresholds. 1