Question

Why do you believe it is important for any business who makes “stuff” (widgets, etc.) to keep track of the current type of inventory it is: raw materials, work in process, or finished goods?

Answer 1

All thesefactors come into play and bring focus to the importance of keeping track ofthe current type of inventory.

These are both the building blocks and the starting point for any final product and ensuring adequate supply and proper management of raw material s is critical. Moreover they represent an investment that affects the cash flow and financial health of an enterprise as the cost is accrued at the point of acquisition and is listed as a current asset on a company's balance sheet. As a result, it is important to use best practices for managing current type of inventory.