An inventory is the detailed classification of movable and immovable property that makes up a person’s commercial wealth or a company. Lists carry out at a specified time.
With the inventory, large and small companies keep total control of merchandise and sales during the commercial period. At the end of this period, the company obtains the final balance and compares it with other years to draw conclusions and take commercial actions based on the result.
Different types of inventories vary according to each company’s size or particularity and the kind of production.
Inventory of finished products: Formed by manufactured products that will be or offer for sale.
Inventory of raw materials: Formed by elements that, once processed, will be a product.
And also, inventory of products in the manufacturing process: Formed by-products in an intermediate approach are not raw material or a finished product; that is, they are being carried out or formed.
Initial inventory: It carries out before the start of operations in a company.
Final inventory: It carries out by the company at the end of each accounting period.
Perpetual inventory: It is given technology through a way software of database. The data are updated instantly at each input or output of a product.
Periodic inventory: It is carried out through a physical count of merchandise each a specific time.
Reserve inventory: Formed by that production surplus used to increase demand or failures in the production process.
Inventory in transit: Formed by those products that have not yet reached the company since they are in the hands of suppliers or transport.
Cycle inventory: Formed by merchandise or raw materials bought in surplus to reduce the cost per purchase unit.
Forecast inventory: Formed by the surplus merchandise produced in periods of low demand to supply high demand periods.
Decoupling inventory: It uses between two processes whose productivity rate is not synchronized.
Delimit the products to inventories. It is essential to establish which products will inventory to withdraw and isolate them to not mix with the rest of the merchandise. You can have a shelf or a particular room for it.
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It is the array of finished goods or goods used in the production held by a company. List classifies as a current asset on a company’s balance sheet, and it serves as a buffer between manufacturing and order fulfillment.
When it sells, its carrying cost transfers to the cost of goods sold (COGS) category on the income statement.
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