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Damages
Definition
Product that becomes unsellable due to physical harm during manufacturing, transportation, warehousing, or in-store handling. Damages typically include crushed packaging, broken seals, or compromised product integrity and must be removed from sellable inventory.
How It's Calculated
Units damaged × unit cost or wholesale value.
Example
A beverage distributor removes 600 bottles from inventory after cases are crushed during pallet transport into the warehouse.
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