The “typical” basic unit (i.e., what is reviewed) is the item, which can be identified by a unique article or material number. If an article is stored in multiple storage locations, the sum of the counted partial quantities represents the inventory to be reviewed. For assessing the agreement between target and actual quantities, it is not important whether the partial quantities of an article are located on the storage locations indicated in the inventory records. What matters for comparison is always the total target and actual quantity of an item. If many articles are stored across multiple locations, this leads to a high counting effort.
Defining the storage location as the basic unit significantly reduces the amount of effort required for the inventory count. However, it must then be ensured that the target quantities recorded in the inventory records for a specific location are actually present at that location. ⇒ significant reduction of effort!
If a storage location contains inventory of multiple different item numbers, the rationalization effect is enhanced by defining the combination of storage location and item number stored at that location as the basic unit. For instance, if a storage location holds five different item numbers, then five basic units will be defined. ⇒ lowest effort!
As a general rule, when defining the basic unit, it should be noted that for the same inventory value, the total number of units to be counted decreases if the range of values of the basic units is smaller. This leads to less variation among the values of the basic units, which has a significant effect on the required sample size.
Furthermore, it is also possible to define pallet IDs, orders, or order items as the basic unit. This should always be considered based on the specific situation.