1, Write the types of Inventory.

There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.
However, some people recognize only three types of inventory, leaving out MRO. Understanding the
different types of inventory is essential for making sound financial and production planning choices.

 5 Basic types of inventories are raw materials, work-in-progress, finished goods, packing
material, and MRO supplies. Inventories are also classified as merchandise and manufacturing
inventory. Other such classifications on various bases are goods in transit, buffer stock,
anticipatory stock, decoupling inventory, and cycle inventory. We will understand different
types of inventory in detail in the further article.

Types of Inventory

There are three types of businesses: trading or merchandising, manufacturing, and service. Out of these,
services are not inventorial. Here, the first inventory classification is based on the nature of the business
– Merchandise and Manufacturing Inventory.

Merchandise Inventory

It is the inventory of trading goods held by the trader.

Read Merchandise Inventory for a detailed explanation.

Manufacturing Inventory

It is the inventory for the manufacturing and selling of goods. Based on the value addition or stage of
completion, the manufacturing inventories are further classified into 3 types of inventory – Raw
Material, Work-In-Progress, and Finished Goods. Another type is MRO inventories which are to support
the whole manufacturing and administrating operation.

 Raw Materials

Every other product we use has been produced by using some or the other raw materials. It is the most
crucial component of inventory for any manufacturing unit and therefore, managing inventory of raw
materials becomes crucial too . For example, natural latex obtained from trees is used to make several
finished products such as mattresses, gloves, balloons, rubber bands, tennis shoes, etc. In short, an
unprocessed or minimally processed material (obtained as mineralores, natural oil, agricultural product)
that undergoes a transformation for creating a finish product in vast quantities is called raw material.
 2, Explain the inventory.

The definition of inventory changes slightly depending on the industry. Here’s a small list of definitions

Inventory refers to all the items, goods, merchandise, and materials held by a business for selling in the
market to earn a profit.

Example: If a newspaper vendor uses a vehicle to deliver newspapers to the customers, only the
newspaper will be considered inventory. The vehicle will be treated as an asset.

Manufacturing industry

In a manufacturing business, inventory is not only the final product manufactured and ready to sell, but
also the raw materials used in production and the semi-finished goods in the warehouse or on the
factory floor.

Example: For a cookie manufacturer, inventory will include the packets of cookies that are ready to sell,
the semi-finished stock of cookies that haven’t been cooled or packed yet, the cookies set aside for
quality checking, and raw materials like sugar, milk, and flour.

Service industry

In a service industry, since there is no exchange of physical stock, the inventory is mostly intangible in
nature. So the service industry inventory mostly includes the steps involved before completing a sale.

Example: For a research consultancy firm, inventory consists of all the information collected for a
project. In the hotel industry, a vacant room is inventory for the owner.

Inventory is:

i) An asset, tangible or intangible,

ii) An asset that can be realized for revenue generation or has a value for exchange, or

iii) An asset which is in process but is meant for sale in the market
What is Waste Management?

The term ‘Waste Management’ collectively means the management of waste from its inception to the
final stage of disposal. Thus, as one single unit, it encompasses right from the collection, disposal,
recycling, to which the processes of monitoring and regulation, respectively belong to, along with the
legal frameworks that enable the occurrence of waste management.

According to Wikipedia

“Waste management or waste disposal are all the activities and actions required to manage waste from
its inception to its final disposal. This includes amongst other things collection, transport, treatment and
disposal of waste together with monitoring and regulation. It also encompasses the legal and regulatory
framework that relates to waste management encompassing guidance on recycling.”