BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
Raw steel
|
|
Raw materials, Work in Process, Finished Goods
|
|
Raw purchase, Work the Process, Unfinished Goods
|
|
Work in Done
|
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: -Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated.
Detailed explanation-3: -Goods you’re making (manufacturing) Manufacturers deal with three types of inventory. They are raw materials (which are waiting to be worked on), work-in-progress (which are being worked on), and finished goods (which are ready for shipping).
Detailed explanation-4: -Raw materials inventory refers to the materials that are used to create a business’s finished goods. While raw material inventory is not sold to end customers as-is, a company keeps raw materials in stock so that they can turn them into work-in-process (or WIP) inventory or finished goods inventory.
Detailed explanation-5: -Any raw material inventory that humans have worked on but is not yet considered a finished good is a work-in-process inventory. You can think of WIP inventory as all inventory that has not yet reached the finished product inventory but is not raw materials. This makes WIP inventory a part of manufacturing inventory.