Inventory

Inventory refers to the goods and materials that a business holds for the purpose of resale, production, or utilization in the manufacturing process. It encompasses a wide range of items including raw materials, work-in-progress, and finished products.

Types of inventory include:

• Raw Materials: Basic materials that are processed to create finished products. Example: Steel for a car manufacturer.
• Work-in-Progress (WIP): Items that are in the production process but are not yet completed. Example: Partially assembled electronics.
• Finished Goods: Products that are completed and ready for sale. Example: Laptops in a retail store.

Case Study: A clothing retailer manages its inventory by analyzing sales trends to determine which items to reStock. During seasonal changes, the retailer may increase inventory of winter apparel and decrease inventory of summer items to align with customer demand.