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What types of Inventory are there?

by CIN7 Team
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Continuing on from Inventory Basics Lesson #1: What is Inventory, in this post we look at the basic types of inventory out there.

Basic Types of Inventory


For retailers, warehouse distributors and wholesalers it’s important to understand the types of inventory used in the supply chain. Below are four primary inventory types you should know, plus other inventory that are important to business.

RAW MATERIALS
This is inventory that can be made into products. These are usually unprocessed with the intention they will be made into finished products.

FINISHED PRODUCTS
Inventory that is ready for people(consumers) to purchase.

WORK IN PROGRESS
This is inventory that is in the process of being made into a product.

MRO (MAINTENANCE, REPAIR AND OVERHAUL)
Inventory that is not part of the production line, but contributes toward the finished good such as consumables or computers.

Other Types of Inventory



TRANSIT INVENTORY


This is inventory that is in process of being delivered from one place to another.

ANTICAPTED INVENTORY


This is inventory that is kept in excess of current demand. This is inventory is kept in antispation that it will be needed in the future, when times are busy i.e. Christmas.

BUFFER INVENTORY


This is extra inventory that is stored for uncertainties in demand and supply. Having too much “safety” or “buffer” inventory may mean increased costs for storage or “holding” this stock.