This discussion relates to the provision in the lower right corner of the setup to establish tolerances for cycle count reporting.
When it comes to certain categories of parts, it may not be practical to be concerned about small discrepancies in cycle counting results. For example, if a cycle count of 4800 inexpensive parts ends up being 50 parts short, that is probably not a serious issue. If an item costs fractions of a penny each, for instance, it would probably cost more to investigate the issue than to simply dismiss the loss. On the other hand, if the parts were more expensive, any discrepancy would be worth investigating.
This ties into the ABC code in the sense that A parts, which are typically the most expensive parts, may have a cycle counting maximum error rate that is very low, such as 1%, and a dollar tolerance of $50.
When all this is established, the detail report will show all items that were cycle counted, the prior-to-count quantity, the counted quantity, and the variance (change in count or cost).
This report can contain a great deal of data. In order to be able to focus on potential problem parts, it is easier to make use of the summary report, which shows only those items which fall outside the tolerance set for a particular ABC code. In this way, the user can focus on the counts that may represent a serious threat to the accuracy of the cycle count and inventory control in general.
In the example shown below, the total variance from the period selected was only $37.30, and further investigation would probably not be needed. If there was a very high value on this report, examination of the detail values would be in order.
