Cycle counting is basically a process where you look at all of your items and you decide how many times you want to be counting these items per year. Based on the number of times you want to count, and this is done by items per year, you actually figure out a schedule where you will count a certain number of items on a daily basis.
By using count cycles, so you don’t shut down your entire warehouse at the same time as that’s something traditional businesses would do.
Wikipedia explains it as – A cycle count is an inventory auditing procedure, which falls under inventory management, where a small subset of inventory, in a specific location, is counted on a specified day.
Note: just to be clear, the image above has nothing to do with cycle counting.