Different types of inventory and their
functions:
1 Raw Materials:
- Raw materials are the input type of
inventory.
- Raw materials are the consumable goods or services required for
processing. ex: fuel, stationary etc.
- They are purchased items for production.
2 Work in process:
- This is a process type inventory of a
system.
- The unfinished goods any business has made are called work in
process inventory.
- These inventories are mostly found in the production stage. ex:
paint shop, final assembly etc.
3 Finished goods inventory:
- Finished goods inventory is the output
inventory of a system.
- Finished goods inventory are the finished goods which are ready
to be distributed through the supply chain or sold.
- Finished goods are considered as assets for an organization.
ex: car, chair etc.