Certified Logistics Associate (CLA) Practice Test 2025 – All-in-One Guide for Exam Success!

Question: 1 / 400

What is meant by 'shrinkage' in a logistics context?

Increase in inventory due to supplier errors

Loss of inventory due to external threats

Any increase in operational costs

Loss of inventory due to theft, damage, or errors

In the logistics context, 'shrinkage' refers specifically to the loss of inventory that can occur for several reasons, including theft, damage, or administrative errors. This concept is significant because shrinkage directly impacts a company's bottom line by reducing the amount of available inventory, which can lead to lost sales and decreased profitability.

Understanding shrinkage is crucial for logistics and supply chain professionals because they need to implement effective strategies to minimize these losses. By addressing the causes of shrinkage—such as improving security measures to prevent theft, investing in better handling practices to reduce damage, and enhancing inventory management systems to reduce errors—companies can better protect their assets and improve overall efficiency.

The other options do not accurately capture the definition of shrinkage. For instance, the

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