GHOSTS IN YOUR INVENTORY A Guide to Conquering Phantom Stock Phantom inventory, also known as ghost inventory or stock, is a silent menace lurking within supply chain management for consumer brands and retailers. Learn how to identify, reduce, and prevent this serious threat to on-shelf availability and your bottom line. WHAT IS PHANTOM INVENTORY?. TL;DR Inventory discrepancy means your system records don't match physical stock. Most companies think they have 95% accuracy but actually operate at 65-75%. That gap is ghost inventory. Root causes are systematic: data entry errors, receiving failures, misplacement, unlogged consumption, yield variance in manufacturing. Discrepancies cause production halts from missing materials, permanent.
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What is Phantom Inventory? Phantom inventory refers to stock that appears in your inventory system but does not physically exist in your warehouse, store, or backroom. It is always a situation where the system counts more units than what is actually on-hand. Phantom inventory is also commonly called ghost inventory, ghost excess inventory, or ghost surplus inventory.. Phantom Inventory Hunter is a prototype data science application designed to identify retail "ghost inventory"—items that the system believes are in stock, but are not selling at expected probabilistic frequencies. This tool bridges the gap between raw statistical anomalies and actionable retail operations by leveraging Agentic AI to analyze flagged SKUs and generate prioritized store audit.
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