ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raw steel
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Raw materials, Work in Process, Finished Goods
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Raw purchase, Work the Process, Unfinished Goods
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Work in Done
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Detailed explanation-1: -There are four main types of inventory: raw materials/components, WIP, finished goods and MRO. However, some people recognize only three types of inventory, leaving out MRO. Understanding the different types of inventory is essential for making sound financial and production planning choices.
Detailed explanation-2: -It is classified as a current asset on a company’s balance sheet. The three types of inventory include raw materials, work-in-progress, and finished goods. Inventory is valued in one of three ways, including the first-in, first-out method; the last-in, first-out method; and the weighted average method.
Detailed explanation-3: -Finished goods inventory is the third and final classification of inventory that is used for accounting purposes by manufacturing companies, the items that are sold to the customer. Manufactured products begin as raw materials and then move into the work-in-progress (WIP) stage as they are being produced.