Inventory Shrinkage from Handling and Storage Losses

$1,000-$3,000 per load (200-500 tons feed); Large feedlot (5,000 head, 20 tons/day) = $50,000-$150,000 annual if handling loss 1.5% vs 0.5% baseline • $1,200-$3,000 per reconciliation cycle; hidden loss of 0.5%-1.71% × inventory value ($500k-$2M grain bins) = $2,500-$34,200 unrecovered per period • $10,000-$50,000 per speculative trade depending on lot size (if shrinkage is negotiated at 1.71% vs. 0.5%, speculator loses $1,400+ per 50k-bushel lot in margin); 500+ annual trades = $700,000-$3.5M annual margin compression if shrinkage is consistently unfavorable

Accounts Receivable Specialist manually compares seller's shrinkage deduction (0.5%-1.71%) against industry tables; disputes resolved via email/phone calls; Excel spreadsheet tracks 'approved' vs. 'disputed' shrinkage claims; no automated validation of handling loss reasonableness • Annual audit compiles supplier shrink rates; out-of-band rates flagged but no enforcement mechanism; suppliers not required to justify; audit findings archived, not acted upon • Annual compliance report notes 0.25% excess shrink but labels as 'acceptable variance'; no root cause investigation; policy not enforced on suppliers