Understanding Shrinkage: What Are the Types and How Do You Calculate Them?

Hi Abhishek Solanki,

Kindly provide information on different types of shrinkage and how to calculate it.

Thank you.

Rg

Please find the answer. Shrinkage is calculated in two parts:

Absenteeism
Total number of people who didn't turn up to the office / Total number of Agents Scheduled.

Attrition
Attrition is another component of shrinkage, but the calculation details are not provided here.

Regards,
Minku

Dear Abhishek, This is in addition to what Minku has said. The concept of shrinkage is present in purchase and inventory management as well. Shrinkage of inventory occurs due to wear and tear of the material, theft, damage while handling, etc. Examples of shrinkage include the storage of perishable food items beyond the expiry date, evaporation of petrol, diesel, or lubricants, corrosion of nuts and bolts, and loss of cement while handling cement bags.

Preventing Shrinkage

To prevent shrinkage, purchase managers or warehouse managers are held responsible for proper material planning. The shrinkage ratio is calculated every half year or year.

Ok...

Regards, DVD

[QUOTE=mupadhyay23;1592300]
Please find the answer. Shrinkage is calculated in two parts:

Absenteeism
Absenteeism is calculated as the total number of people who didn't turn up to the office divided by the total number of agents scheduled. This formula is typically used in BPO operations.

Attrition
Attrition refers to the reduction in staff numbers due to resignations, retirements, or other reasons.

Regards,
Minku