MANAGEMENT

Detailed explanation-1: -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-2: -Inventory is the goods or materials a business intends to sell to customers for profit. Inventory management, a critical element of the supply chain, is the tracking of inventory from manufacturers to warehouses and from these facilities to a point of sale.

Detailed explanation-3: -There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.

Detailed explanation-4: -Example #1 Given the high consumption of soaps, it reorders raw materials to start manufacturing the next lot. Raw materials ordered beforehand, in this case, act as the inventory for the company. And the already delivered finished products are the inventory for retail units that will be selling soaps further.