Describe the four types of inventory. Give examples.
The four types of inventories are raw material inventory, work-in-process inventory, maintenance/repair/operating supply(MRO) inventory and finished-goods inventory.
Raw material inventory include the materials that are purchased but are yet to enter the manufacturing process. These will be used in the production process and transformed to the final product. Examples of raw materials may include wood, screws and nails used for manufacturing furniture.
Work-in-process inventory contains the components or raw materials that have undergone some changes but not yet transformed into finished goods. The examples may include the wooden frames made in the middle of the manufacturing of furniture.
MROs are the ones that are kept for the maintenance, repair or operation of the product but not a part of the final product. The example may include the repair tools kept for repairing the furniture.
Finished-goods inventory includes the completed product that can be shipped. The example includes the finished furniture that can be shipped to the customer.
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