Types of inventory

There are following types of inventory:

  • Materials - components of current assets purchased from suppliers designated for use in production processes. Their value is entirely transferred to the manufactured products. The materials include: raw materials, packaging, fuel, basic and auxiliary materials, spare parts and waste from production.
  • Work-in-progress consists of semi-finished products and products in progress, along with finished products they constitute work products for which the technological process has not ended. Their material form is not suitable for storage.
  • Semi-finished products are products obtained from completed production processes transferred to a warehouse for further processing in the same company or transferred for sale outside.
  • Finished products are compliant with quality standards, accepted by technical inspection, in accordance with the terms of receipt by buyers, intended for sale, products of their own production. Finished products are for example services, design works, finished products. They occur only in manufacturing enterprises.

References

  • Vereecke, A., & Verstraeten, P. (1994). An inventory management model for an inventory consisting of lumpy items, slow movers and fast movers. International Journal of Production Economics, 35(1-3), 379-389.
  • Buzacott, J. A., & Zhang, R. Q. (2004). Inventory management with asset-based financing. Management Science, 50(9), 1274-1292.
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