shrinkage

(engineering) Contraction of a molded material, such as metal or resin, upon cooling. Contraction of a plastics casting upon polymerizing.
(geology) The decrease in volume of soil, sediment, fill, or excavated earth due to the reduction of voids by mechanical compaction, superimposed loads, natural consolidation, or drying.

The amount by which inventory on hand is shorter than the amount of inventory recorded.

Investopedia Says:
The missing inventory could be due to theft, damage, or book keeping errors.

Merchandising: gradual loss of inventory over time due to damage, misplacement, or theft. Retailers must allow for some shrinkage in their financial planning. Shrinkage is especially high during the Christmas season, when temporary employees, with little experience, are hired and inventory levels are at capacity. Shoplifting is a major cause of shrinkage in the United States.

Printing: reduction in size from the original of a mold used to cast printing plates. See also matrix.

1. Difference between actual physical inventory and the amount that should be on hand by the book inventory.

2. The difference between the weight of natural grain and its weight after proper drying.

3. Weight loss of a commodity that normally results during processing into a finished product.

Shrinkage has multiple meanings, depending on the context.

• Shrinkage (accounting) - the loss of products
• Shrinkage (statistics) - a technique to improve an estimator
• Shrinkage (casting) - a casting defect brought about by the reduction in volume of the cast material as it cools and solidifies
• Shrinkage (slang) - slang term referring to penis size, particularly when the penis and scrotum contract in response to chilling.

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