inventory.md

Zakat-Aware Inventory Tracking Algorithm (with Lunar Cycle)

1. Initial Recording:

   • Quantity: Record the number of items in each batch.
   • Original Price: Note the price you paid for each batch.
   • Purchase Date (Hijri): Record the date of purchase according to the Islamic lunar calendar (Hijri).

2. Price Change Tracking:

   • Record Changes: Update the "exchange rate" for each batch whenever the price changes.

3. Zakat Calculation (End of Lunar Year):

   • For each batch:
     • Determine if a full lunar year has passed since the purchase date.
       • If yes:
         • Calculate the "Zakat value" using the current quantity and the latest exchange rate.
         • Include this batch in the total Zakat calculation.
       • If no:
         • Exclude this batch from the Zakat calculation for this year. Its Zakat will be due in the following year when it completes a full lunar cycle.
   • Sum the "Zakat values" of all eligible batches to get your total inventory value.
   • Apply the 2.5% Zakat rate to the total value.

Explanation:

• Lunar Year Cycle: Zakat on inventory is due after the goods have been in your possession for a full lunar year. This algorithm tracks the purchase date in the Hijri calendar to ensure accurate timing.
• Eligibility for Zakat: Only batches that have completed a full lunar year cycle are included in the Zakat calculation for that year.
• Postponed Zakat: Batches that haven't yet completed a full lunar year are excluded from the current year's Zakat calculation. Their Zakat will be due in the following year.

Example (with Lunar Cycle):

• Initial Recording:
  • Batch 1: 100 scarves bought on 1st Muharram 1446H at $10 each.
  • Batch 2: 50 scarves bought on 15th Rajab 1446H at $15 each.
• Price Change: Later in the year, the price of scarves in Batch 2 increases to $20 each.
• Zakat Calculation (End of 1446H):
  • Batch 1: Full lunar year completed - include in Zakat calculation.
    • 100 scarves at $10 each = $1000 Zakat value
  • Batch 2: Not yet a full lunar year - exclude from Zakat calculation.
• Zakat Calculation (End of 1447H):
  • Batch 1: Already included in last year's Zakat - exclude.
  • Batch 2: Full lunar year completed - include in Zakat calculation.
    • 50 scarves at $20 each = $1000 Zakat value

Additional Tips:

• Hijri Calendar Tools: Utilize online converters or apps to easily track dates in the Hijri calendar.
• Clear Labeling: Clearly label each batch with its purchase date (Hijri) to facilitate easy tracking.

By incorporating the lunar year cycle, this algorithm ensures a more precise and religiously compliant calculation of Zakat on your inventory.