Inventory

What is Inventory?

Inventory refers to the goods and materials that a business holds for the ultimate goal of resale, production, or utilization. It is a critical component in the supply chain and a significant asset for retail and manufacturing companies. Proper inventory management is essential for maintaining a company's financial health by optimizing stock levels and minimizing storage costs.

Short Description: Assets that are ready for sale or will be produced into finished goods and sold to generate revenue.

• Raw Materials: Basic goods used in the production process to make finished products.
• Work-In-Progress (WIP): Items that are in the production phase and not yet complete.
• Finished Goods: Completed products that are ready for sale to customers.
• Maintenance, Repair, and Operating Supplies (MRO): Items used in the production process but not included in the final product.

Proper inventory management balances the cost of holding inventory against the need to fulfill customer orders promptly, thus playing a pivotal role in a company's operational success.