Cycle counting as an inventory control method is best defined as?

• A. An on-demand process.
• B. A full yearly audit only.
• C. A periodic inventory audit method to maintain accuracy by counting a subset of items.
• D. A monthly shipment count.

Answer: (C)

Cycle counting keeps inventory records accurate by regularly counting a portion of items on a rotating schedule rather than doing a single full-count each year. This method treats counts as periodic audits that verify and adjust what’s on hand for a subset of items, which helps catch and correct variances without shutting down operations for a full stock take. It fits smoothly with a perpetual inventory system and focuses attention on items chosen for importance or risk (like high-value or high-variance items), then cycles through the rest over time. This is why the best definition is a periodic inventory audit method to maintain accuracy by counting a subset of items. It isn’t an on-demand process, a yearly only audit, or merely a monthly shipment count.