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Wednesday, May 26, 2010

Classification of Inventories - Inventory Types

Inventories are classified in different categories:
 
1. Production Inventories : Items which go into the final products raw materials and bought out components.

2. Maintenance, Repair and Operating Inventories : Items which do not form a part of final product but are consumed in a prod. Processes, spare parts, Consumable items etc.
3. In Process Inventories : Work-in-progress items which are partly manufactured and await the next stage in process.

4. Finished Goods Inventories: completed products ready for dispatch.

5. Miscellaneous Inventories : Which arise out of the above four types of inventory scrap, surplus and obsolete items which are not to be disposed off. Inventories are also classified as :

  • Transit Inventory/Pipe line inventory : Transit inventory exist between factory & place of supply or between & factory. e.g. Coal, iron ores etc.
  • Buffer inventory/Safety Stock Inventory/Fluctuation Inventory : These are the inventories maintained to adjust with variation in demand & supply.
  • Anticipation Inventory : These inventories are maintained to adjust with sudden change in demand ( e.g. seasonal products ). This will avoid idle or shut downs & resource utilization can be increased.
  • Decoupling Inventories : Same as in process inventories to ensure smooth & uniform work flow.
  • Cycle Inventories/Lot size Inventories : These are maintained wherever the user makes or purchases material in larger lots than are needed for his immediate.
Keywords: Types of Inventories, Inventories Types, Classification of Inventories

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