Editing Inventory (section)

===Inventory examples===
While [[accountant]]s often discuss inventory in terms of goods for sale, organizations—[[manufacturer]]s, [[service provider|service-provider]]s and [[not-for-profit]]s—also have inventories (fixtures, equipment, furniture, supplies, parts, etc.) that they do not intend to sell. Manufacturers', [[distribution (business)|distributor]]s', and wholesalers' inventory tends to cluster in [[warehouse]]s. [[Retailer]]s' inventory may exist in a warehouse or in a [[Retailing#Shops and stores|shop]] or store accessible to [[customers]]. Inventories not intended for sale to customers or to [[consumer|client]]s may be held in any premises an organization uses. Stock ties up cash and, if uncontrolled, it will be impossible to know the actual level of stocks and therefore difficult to keep the costs associated with holding too much or too little inventory under control.

While the reasons for holding stock were covered earlier, most manufacturing organizations usually divide their "goods for sale" inventory into:
* [[Raw materials]]: Materials and components scheduled for use in making a product.
* [[Work in process]] (WIP): Materials and components that have begun their transformation to finished goods. These are used in process of manufacture and as such these are neither raw material nor finished goods.<ref>{{cite web |last1=Jaiswal |first1=Vishal |title=Types of Inventory and Quality Standards |url=https://www.mechanicalsite.com/2019/12/types-of-inventory-and-quality-standards.html |archive-url=https://web.archive.org/web/20191221074849/https://www.mechanicalsite.com/2019/12/types-of-inventory-and-quality-standards.html |url-status=usurped |archive-date=December 21, 2019 |website=www.mechanicalsite.com |publisher=Mechanical Site |access-date=2 December 2019}}</ref>
* [[Finished goods]]: Goods ready for sale to customers.
* Goods for resale: Returned goods that are salable.
* Stocks in transit: The materials which are not at the seller's location or buyers' location but in between are "stocks in transit". Or we could say, the stocks which left the seller's plant but have not reached the buyer, and are in transit.
* Consignment stocks: The inventories where goods are with the buyer, but the actual ownership of goods remains with the seller until the goods are sold. Though the goods were transported to the buyer, payment of goods is done once the goods are sold. Hence such stocks are known as consignment stocks.
* Maintenance supply.

For example:

====Manufacturing====
A canned food manufacturer's materials inventory includes the ingredients to form the foods to be canned, empty cans and their lids (or coils of steel or aluminum for constructing those components), labels, and anything else (solder, glue, etc.) that will form part of a finished can. The firm's work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers. This may be vats of prepared food, filled cans not yet labeled or sub-assemblies of food components. It may also include finished cans that are not yet packaged into cartons or pallets. Its finished good inventory consists of all the filled and labeled cans of food in its warehouse that it has manufactured and wishes to sell to food distributors (wholesalers), to grocery stores (retailers), and even perhaps to consumers through arrangements like [[factory outlet|factory store]]s and outlet centers.

==== Capital projects ====
The partially completed work (or work in process) is a measure of inventory built during the work execution of a capital project,<ref>“Construction: one type of Project Production System”, Proceedings of ''13th Annual Conference of the International Group for Lean Construction.'' Sydney, Australia, 19–21 Jul 2005. pp 29–35</ref><ref>“Strategic Positioning of Inventory to match demand in a capital projects supply chain”, K. D. Walsh, J. C. Hershauer, I.D. Tommelein and T. A. Walsh, Journal of Construction Engineering and Management, Nov–Dec 2014, p 818</ref><ref>{{cite journal|title = New Era of Project Delivery – Project as Production System|first1=R. G. |last1=Shenoy |first2= T. R.|last2= Zabelle|journal= Journal of Project Production Management|volume = 1 |date = Nov 2016|pages =13–24  |url=https://www.researchgate.net/publication/312602707  |url-status=live |archive-url=https://web.archive.org/web/20170218063109/https://www.researchgate.net/publication/312602707_New_Era_of_Project_Delivery_-_Project_as_Production_System |archive-date=2017-02-18 }}</ref> such as encountered in civilian infrastructure construction or oil and gas. Inventory may not only reflect physical items (such as materials, parts, partially-finished sub-assemblies) but also knowledge work-in-process (such as partially completed engineering designs of components and assemblies to be fabricated).

====Virtual inventory====
A "virtual inventory" (also known as a "bank inventory") enables a group of users to share common parts, especially where their availability at short notice may be critical but they are unlikely to required by more than a few bank members at any one time.<ref>''Inventory and Logistics Operations'', CIPS Study Materials, Profex Publishing, 2012, page 54</ref> Virtual inventory also allows distributors and [[Fulfillment house|fulfilment house]]s to ship goods to retailers direct from stock, regardless of whether the stock is held in a retail store, stock room or warehouse.<ref>PLS Logistics, [http://info.plslogistics.com/blog/more-inventory-less-warehouse-space-how-virtual-inventory-works More Inventory, Less Warehouse Space: How Virtual Inventory Works] {{webarchive|url=https://web.archive.org/web/20180208123430/http://info.plslogistics.com/blog/more-inventory-less-warehouse-space-how-virtual-inventory-works |date=2018-02-08 }}, published 22 March 2016, accessed 7 February 2018</ref> Virtual inventories allow participants to access a wider mix of products and to reduce the risks involved in carrying inventory for which expected demand does not materialise.<ref>Symes, S., [https://smallbusiness.chron.com/purpose-creating-virtual-inventory-24491.html The Purpose of Creating a Virtual Inventory], ''Chron'' ([[Houston Chronicle]]), accessed on 14 July 2024</ref>