UNSCHEDULED INVENTORY.- This inventory is conducted as a result of the following:

1. Spot Inventories of Warehouse Refusals. These are usually caused by errors between the stock records and the actual location. A warehouse refusal occurs when stock point records indicate an on-hand balance but the material cannot be located to satisfy a requisition. Processing the warehouse refusal results in customer credit, referral of the requisition, adjustment of stock record balance to zero, and the processing of an inventory adjustment. The procedures for processing warehouse refusals are listed in enclosure 2 of NAVSUPINST 4440.115. The stock points that do not elect to use this procedure must conduct a spot inventory of all warehouse refusals with a total dollar value greater than $800 (excluding DLA-owned material).

NOTE: A spot inventory must be conducted for all sensitive or pilferable items that have experienced a warehouse refusal.

To ensure timely processing of requisitions, the potential warehouse refusal must be researched and resolved according to the time frames in Table 5-2.

Table 5-2.-Warehouse Refusal Time Frame

2. In-house Receipt Losses. An inventory must be conducted for all in-house receipt losses with a dollar value over $800.

_{3. Location Survey.} An inventory must be conducted if the following stock record differences are identified:

l The material was found in an unrecorded location

l Potential gains (material is in the location, but stock record shows zero balance)

l Potential losses (material not in location, but stock record shows there is material on-hand)

4. Selected Item Inventory. This is requested locally when a known or suspected imbalance exists between the recorded and actual on-hand balance, or to resolve a Report of Discrepancy (ROD).

5. Naval Inventory Control Point/Defense Supply Center (NAVICP/DSC) Directed Inventory. The physical inventory requests are generated by the NAVICP/DSC when a bounceback is received and the ^research reveals that one of the following conditions exists:

l The bounceback is for condition code A material and the on-hand system asset in A condition is less than the projected quarterly demand.

l The bounceback is for a fleet-controlled item (any condition).

NOTE: The NAVICP/DSC freezes their records to prevent processing of requisitions until the results of inventory is received.

The NAVICP/DSC may also request for location reconciliation to resolve record/quantity mismatches. A physical inventory of assets is also required before

processing material transfer only if record balances are suspect or the item is classified or sensitive.

SCHEDULED INVENTORY.- This inventory is accomplished at a given time for a specific material category. The inventory frequency for each type of material is discussed in the following paragraphs.

General Supplies.- A random statistical sample inventory of the total population of items in storage is conducted quarterly to determine the overall inventory accuracy rate. Activities under the Uniform Automated Data Processing System-Stock Points (UADPS-SP) use the Statistical Accuracy Techniques and Measurements Analysis (STATMAN) system to perform the sample inventory. The non-UADPS-SP activities have the 'option to perform an annual wall-to-wall inventory instead of a quarterly sample inventory.

For arms, ammunition, and controlled inventory items, use the procedures described in OPNAVINST 5530.13. Sonobuoys must be inventoried annually.

Narcotics, drug abuse items and alcohol, and precious metals (Security codes Q and R) are inventoried quarterly. Refer to NAVSUPINST 4440.146 for additional information.

Classified (Security codes A through H, K, L, O, S, and T) items are inventoried annually as required by DODINST4140.35, In addition to the annual inventory requirement, NAVSUP Publication 1, Volume II, Supply Ashore, requires the maintenance and reconciliation of dual stock records. This is performed by matching the manual stock records and the master stock item record (MSIR). The manual stock record is to be maintained on NAVSUP Form 766, Stuck Record Card, by the storage branch/division. To ensure inventory accuracy, the annual classified inventory and the reconciliation of the manual stock record must be scheduled alternately at six-month intervals.

Pilferable items (Security codes I, J, M, V, W, X, Y, Z) must be inventoried annually as required by DODINST4140.35.

Consumer Level Stock.- These are items carried in service marts (SERVMARTS), shop stores, ready supply stores, and W purpose repairables that are part of the fixed allowance assets.

Items in SERVMART must be inventoried once each fiscal year according to NAVSUPINST 4400.59. The inventory adjustments (based on dollar value of gains or losses) must not exceed one percent of the total sales since the last scheduled inventory. If the inventory adjustment is over one percent, an inventory must be

taken quarterly until the financial adjustments are within limits as prescribed by NAVSUPINST 4400.59.

The shop stores and ready supply stores are inventoried once each fiscal year according to NAVSUP Publication 1, Volume 2, Supply Ashore.

Inventory the fixed allowance assets in W purpose (SHORCAL) annually according to NAVSUPINST 4440.160.

Scheduled Inventory Requirements

During the fourth quarter of each fiscal year, stock points prepare a physical inventory schedule for the following fiscal year. The stock points should consider the following factors when preparing the schedule:

1. The estimated number of scheduled and unscheduled inventories to be conducted for the fiscal year.

2. Results of the recent statistical random sample inventories and location surveys. If the results dictate the need for a wall-to-wall inventory, the annual schedule must be updated with the scheduled inventory requirement.

3. Requests for inventory from the NAVICP/DSC.

4. Mandatory inventory requirements described in previous paragraphs.

Format for Annual Physical Inventory Schedule

The annual schedule indicates the inventories projected for execution during each quarter of the fiscal year. The schedule should be in the following format:

1. Inventory Segment. This column identifies the type of material to be inventoried. Some examples of the different types of material are classified, specific supply group or class, and so forth.

2. Scheduled Inventory Line Items. This contains the number of line items included in the segment of inventory.

3. Warehouse/Warehouse Areas. This identifies the warehouse or warehouse areas in which the inventory is conducted.

4. Preliminary Cutoff Date. At start of business on this date (7 to 15 days before the actual cutoff date), inventory controls are established and tracking of in-process transactions begin.

5. Actual Cutoff Date. This date is established at the close of business for the day or as the first order of business the next day. The stock point record balances are obtained at this time.

6. Date Count Commences. The count should begin on the first workday after the actual cutoff (if run as the last day's order of business) or the day of cutoff (if run as the first order of business).

7. Estimated Number of Unscheduled Inventories. This is the estimated number of spot and special inventories to be conducted during each quarter of the fiscal year.

COPIES OF INVENTORY SCHEDULE.- A copy of the inventory schedule is provided to the areas that process receipts, issues, reidentification, catalog changes, and so forth. In automated activities, a copy of the scheduled inventory is provided to the data processing activity. The data processing activities are responsible for running the physical inventory program according to the schedule.