Final answer:
There are four basic types of inventory: raw materials, work-in-progress, finished goods, and maintenance, repair, and operations (MRO) inventory.
Step-by-step explanation:
Inventories is a small category that refers to the goods that one business has produced but has not yet sold to consumers, and are still sitting in warehouses and on shelves. There are four basic types of inventory:
- Raw materials inventory: This includes the materials that are used to produce finished goods. For example, in a bakery, flour, sugar, and eggs would be considered raw materials inventory.
- Work-in-progress inventory: This includes unfinished goods that are still in the production process. For example, in a car manufacturing plant, partially assembled cars would be considered work-in-progress inventory.
- Finished goods inventory: This includes fully completed products that are ready for sale. For example, in a clothing store, shirts, pants, and dresses would be considered finished goods inventory.
- Maintenance, repair, and operations (MRO) inventory: This includes goods that are used to support the production process but are not directly used in the final product. For example, tools, equipment, and cleaning supplies would be considered MRO inventory.