Question

What are the three types of inventory that manufacturing companies usually have?

1) Raw materials inventory, work-in-progress inventory, finished goods inventory
2) Purchased inventory, leased inventory, rented inventory
3) Physical inventory, virtual inventory, digital inventory
4) Obsolete inventory, damaged inventory, expired inventory

Answer 1

The three types of inventory that manufacturing companies usually have are raw materials inventory, work-in-progress inventory, and finished goods inventory.

Step-by-step explanation:

The three types of inventory that manufacturing companies usually have are:

1. Raw materials inventory: This includes all the materials and components that are used in the production process but have not yet been transformed into finished goods. Examples of raw materials inventory include wood for furniture manufacturing or steel for car manufacturing.
2. Work-in-progress inventory: This includes goods that are in the middle of the production process. They have been partially transformed from raw materials into finished goods but are not yet complete. For example, a car that is partially assembled but still needs additional work would be considered work-in-progress inventory.
3. Finished goods inventory: This includes goods that have completed the production process and are ready to be sold to consumers. Examples of finished goods inventory include fully assembled cars or packaged food items.