If you have been in the manufacturing business for a long time then you must be aware of the different forms of inventory. In this article we will discuss these different types of inventory. The three categories of inventory are raw material inventory, finished products inventory and direct materials inventory which consist of the stock of material that the business has bought for its usage in manufacturing; direct material inventory comprises the whole cost of the raw material that the business buys for its manufacturing process; and finished products inventory comprises the cost of finished goods that are manufactured by the manufacturing business and sold to customers. If you think that understanding the types of inventory is very important for your business growth, then read on as you will learn how to maintain proper types of inventory. In this article I would like to discuss three types of inventory. If you would like to know what are the 4 types of inventory please click on the links below.
Raw material inventory This type of inventory usually comprises raw materials like coal, iron ore and wheat. These raw materials are normally used in the industrial process but there are certain times when you will use such raw materials even when there is no industrial purpose. In such cases, the use of these materials will help to reduce the cost of production. This is the commonly used inventory in most of the businesses today. If you want to know more about the definition of raw material then please visit the site below.
Work-in Progress Inventory This type of inventory normally includes raw materials and work-in-process equipments and other materials that have been ordered to complete a particular job. Usually it is used to measure the progress of production and standardize the whole production process. In work-in Progress category you will find different types of equipment like robots, machineries, forklifts etc that plays an important role in every business. In order to make the work-in-completion better for the customer, you should make sure that the equipments are available at your desired place.
Finalizing Inventory This type of inventory refers to the products which are generally required for completing the job or for packing and palletizing. The main aim behind the material inventory is to ensure that the raw materials, plants, machinery and all other assets are available at the time of need. This helps to make the working smoothly and you can avoid wastage of materials, money and manpower. You should keep the record of material stock and you should also keep the manual of the same. If you want to know more about the record of goods then you can visit the site below for more information.
Fulfilling Inventory This type of inventory helps you determine the stocks of finished products which are still required to be produced after using up the raw materials. In short, we can say that this sort of inventory is similar to the final inventory but it involves fewer details and checks. In this category of goods, you can include the rejected items or those that are not necessary in the process of production. It is not possible to complete the production without raw materials and you cannot sell the finished product unless you have all the raw materials at hand.
Semi-finished Inventory This sort of inventory involves the stocks of raw materials, semi-finished goods and finished product. These are the products that are finished and are ready for sale. You should make sure that you do not ignore the stocks of semi-finished goods. As per the requirement of the manufacturing industry, these sorts of stocks can be purchased from a wholesaler. There are many service industry based organizations which sell these stocks at very reasonable rates. Check out this post for more details related to this article: https://en.wikipedia.org/wiki/Distribution_software.
