Inventory

Inventory is everything a business has on hand to sell or use in making products.

Think of it as your business’s “stuff” – all the goods, materials, and products you need to keep your operation running! 🏭

It includes:

• Items ready for sale
• Materials used in production
• Work-in-progress goods
• Supplies for operations

👆 By the way, an interesting fact: The word “inventory” comes from the Latin “inventarium,” meaning “a list of what is found.”

Types of Inventory

Some of the common types of inventory are:

1. Raw Materials 🌱

• Basic materials used to make products
• Example: Fabric for clothing
• Wood for furniture
• Metal for machinery

2. Work-in-Progress (WIP) ⚙️

• Partially completed products
• Items being assembled
• Products waiting for final touches
• Materials in the production line

3. Finished Goods 🎁

• Completed products ready for sale
• Items in warehouses
• Products on store shelves
• Ready-to-ship merchandise

4. MRO Supplies 🔧

• Maintenance materials
• Repair parts
• Operating supplies
• Tools and equipment

5. Safety Stock 🛡️

• Extra inventory for emergencies
• Buffer against shortages
• Protection from supply chain issues
• Insurance against unexpected demand