What is inventory and types of inventory?

Marketing Dec 20, 2020

Expert Solution

Inventory:

Inventory is a stock of physical goods that contain an economic value, and are held in various forms by an organization for use or sale in a future point of time.

Types of inventory:

1. Raw material: Raw materials are the physical resources to be used in the manufacture of finished products. It can be in the natural or raw form. For example, oilseed for oil mill, Cotton for cotton mills, etc.

2. Semi-finished goods: Semi-finished goods are those which are not yet finished but that is not raw also. That means some work is done on these materials but some processing still remains to be done before the product can be sold.

3. Finished goods: Finished goods are goods that are complete and ready for sale.

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