The four major types of inventory are: excess inventory, WIP inventory, finished goods inventory, and MRO...

The four major types of inventory are: excess inventory, WIP inventory, finished goods inventory, and MRO inventory.

A

True

B

False

Expert Solution

The correct answer is option B.

Inventory is nothing but the stock or goods that are stored. The reason companies manage their inventory is to meet the demands which help the companies to carry out their supply chain management effectively.

The four types of inventory include:-

Raw material - these are the inputs that are required for production process to manufacture the output or good. Companies receive raw materials from the suppliers. Raw material management is important for proper and continuous operations to take place in an organization. Example Facebook raw material is pallets.
Work in progress - this refers to the inventory that are being manufactured within the organization or with the contract manufacturing companies. It is very important to monitor these inventories with the help of Enterprise Resource Planning (ERP).
Finished goods - this refers to the output that are being produced and kept in the warehouse or managed by the distributors. It is important for the organization to monitor the distributors effectively. Example - car is the finished good of a car manufacturing company.
Transit inventory - these inventories are those that are being transported from one location to other which requires time. These inventory are also called pipeline inventory. Example - car that are being transported from one location to another

keosha answered 1 year ago

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