Inventory

Types of Inventory

It is useful to categorize types of inventory, and we generally have two ways to categorize it.

By Stage

There are three basic stages of inventory

1. Raw Materials Inventory: the basic inputs that will be used in production but have not yet been processed. In the raw form that suppliers gave them.
2. Work in Process Inventory: Product at an intermediate stage that has been partially processed but not yet completed.
3. Finished Goods Inventory: Product ready to be sold

There are some Auxiliary categories which include:

• Reuse Inventory
• Goods for Resale
• Spare Parts Inventory
• Maintenance, Repair, and Operations (MRO) Inventory

By Function

Here we organize the inventory based on what it’s doing and why we have it.

1. Cycle Stock
2. Buffer Inventory
3. Pipeline Inventory
4. Decoupling Inventory
5. Anticipation Inventory
6. Speculation Inventory