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This engineering guide is intended as an introduction for senior management and process engineers in the logistics, manufacturing and distribution industries. It explains what can and what cannot be accomplished with a program of cycle counting. It describes how cycle counting should be structured and how it should fit into the organization. It reviews the math required to determine the optimum level of cycle counting and lays out a sample cycle counting program that includes the training required, both for the workers who actually perform the counts and for the supervisors who direct them and use the results. It discusses the reasons why full physical inventories may be necessary, the problems associated with accuracy, and the circumstances under which they can be eliminated. It reviews inventory-taking processes and discusses training and auditing requirements and can serve as a guide for the auditors and supervisors who specify and control the process.