Different types of inventories are used in different stages of production.
That is:
- Before production
- During production
- After production
Raw Materials Inventory (Before production)
Inventory before production is called Raw Materials Inventory. These are inputs to manufacturing. For example, raw materials purchased but which are yet to enter production process. Sub-assemblies purchased and component parts also come under this category.
Work-in-Process Inventory (During production)
Inventory during production stage is called Work-in-Process Inventory. These are partially-finished products in various stages of completion.
Finished Goods Inventory (After production)
Inventory after production is called Finished Goods Inventory. These are completed products ready for shipment to dealer or sale to customer
The following video shows an example of each of these types of inventories.
