Types of Inventory
As we indicated that in the inventory explanation, there are different types of inventory businesses hold on to. We can arrange into a group up the different types of inventory into 4 main parts:
First Type of Inventory- Raw materials Inventory:
Raw Materials are the most introductory materials that businesses need in making their final products. Raw material inventory comprises of introductory materials that have not yet been committed to production in a manufacturing firm. Raw materials that are purchased from business firm to be utilized in the firm's production operations range from iron ore awaiting proceeding into steel to electronic components to be incorporated into computers. The intention of preserving raw material inventory is to separate the production function from the purchasing function hence that any problem in shipment of raw materials do not ca employ production delays.
Second Type of Inventory- Spare Parts:
This category let ins those products, which are complimentary to the main products produced for the intention of sale. some instances are of spare part items are bolts, nuts, clamps, screws etc. These spare parts are in general purchased from outside or some times they are manufactured in the company also.
Third Type of Inventory - Work-in-procedure:
Work-in-procedure Inventory: This category let ins those materials that have had work done on them but have not been completed. The more complex and lengthy the production procedure, the larger will be the investment in work-in-procedure inventory. Its intention is to uncouple the several operations in the production procedure hence that machine failures and work stoppages in one operation will not affect the other operations.
Fourth Type of Inventory - Finished Good Inventory:
Stock of Finished Goods : These are finished products awaiting sale. The intention of finished goods inventory is to uncouple the productions and sales functions hence that it no longer is essential to produce the goods before a sale can come about.
The introductory flow of production reveals the essential type of inventory that businesses must keep. Raw materials are turned into work in procedure which is then metamorphosed into finished goods whilst all throughout being supported by spare parts. There are other types of inventory that some businesses can have such as damaged, obsolete goods and rejected, but the four which are mentioned above address most of the industries.
For another point of view-on the matter, here is an exception from inventory control specialists:
Normal Inventory
As it shows, this type of inventory item will be utilized for the majority of investor parts. It will correctly track the inventory received and trade don a first enter first out groundwork, will manage cost of sales, and will warn investor when you are out of stock.
Non Inventory Type
This is utilized for selling things that are not really inventory items. For example,investor could be selling warranty, but since investor don't have warranty in a box to sell, and you'll never run out of stock,investor won't need to keep inventory control on it. In addition, there is no cost of sale adjustments with non-stock items. The system will not compute how much investor paid for the item, and thus will not try to remove that value from inventory in the generalized ledger. If investor are selling something that does cost investor money, then investor will have to manage these details manually.
Labor Parts
Investor do not have technicians hanging from hooks in investor back room,hence like non-inventory items, the system will not try to remove them from inventory when investor sell a labor item. The two differences among Non-Inventory items an Labor items are that investor can optionally have the system ask investor for the technician code that did the work hence that investor can print reports showing who did what work. in addition, the system will optionally ask for a comment to explain what was done hence that the description of the service work can be printed on the invoice.
Note too that investor can optionally keep track of how much time was exhausted and how much time was charged for on a per job basis. At the end of the month,investor can then print technician productivity reports to compare total time spent compared to billable hours. In the automotive industry, some mechanics can do the work faster than is what is billed since the billing is based on industry standards.
Consignment Items
Consignments can be utilized to keep track of inventory that investor don't own, but at the time investor sell it,investor must pay for it. You'll be able to bring forth several reports, along with list of inventory that is on consignment but not traded and a list of inventory traded on consignment, but not yet paid for.
Floor Plan Inventory
Floor planning is very alike to consignment, except that investor take possession and own the inventory when investor receive it, but investor don't have to pay for it until it's sold, or until it's been in the store for a negotiated period of time. On the other hand,investor do own the inventory and do have to pay for it sometime.
Some floor planning companies want the ability to check the inventory serial number by serial number for the larger items, and others may just want to count the number of each one model number on hand. Regardless of the fact that Windward System Five can manage it.
On the accounts payable side,investor will be able to keep track of who investor owe the money too (Floor Planning Company) and who investor actually bought the inventory from (Supplier) and bring forth proper histories of each one
Product Inventory
Products are items such as vehicles that investor may service or repair after selling them to the investor. That is why, they are an item in the database that can be traded, and when traded, are automatically added to the customer's list of products that can be worked on.
Some instances are vehicles, trucks, recreational vehicles, fridges, air conditioners, and chainsaws. The system will let in investor keep additional information on these products, such as make, model, year, and other comments. It will also be able to list all the work or repairs executed among two dates.
Windward System Five can also chase whole goods such as re creative vehicles by keeping track of the cost of the item before the sale, add ons and predelivery inspection items. In addition, the system can bring forth a wash out report one level deep to demonstrate the costs and income linked with the trade in.
Serialized Inventory
Those items that demand to be tracked by their serial numbers can be marked as serialized inventory. For instance computers, fridges, stoves and chainsaws may all be serialized. Note that if investor plan on service of these items in the future and keeping track of all work investor do on them, they should be entered as products or else of serial numbers.
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