What is "Cycle Counting" in inventory management?

Cycle counting is a systematic counting procedure in inventory management that involves counting a specific subset of inventory items on a regular basis throughout the year rather than undertaking a full inventory count all at once. This method allows for continuous monitoring and verification of inventory accuracy, enabling businesses to identify discrepancies in real time, maintain more accurate stock records, and improve overall inventory control.

By focusing on different segments of inventory at different times, businesses can concentrate their counting efforts on high-value or high-turnover items more frequently, thereby ensuring that discrepancies are addressed more promptly and efficiently. This approach not only enhances inventory accuracy but also minimizes disruptions to operations that would be caused by a full inventory count.

In contrast, the other options do not accurately describe cycle counting. Tracking sales performance, annual full inventory counts, or measuring employee productivity are entirely different processes and do not capture the essence of what cycle counting aims to achieve in inventory management.