Types of Inventories A natural classification is by value added from manufacturing (the values are added to inventories at each level of the manufacturing operations,finally all values are cumulated with finished goods): Raw materials-Resources required in the production or processing activity of the firm. Components-Raw materials or subassemblies that will later be included into a final product. Work-in-process(WIP)-the inventory either waiting in the system for processing or being processed. It may includes component inventories and some raw materials; the level of WIP is taken as a measure of the efficiency of a production scheduling system. JIT aims at reducing WIP to zero. .Finished good-also known as end items-the final products.Types of Inventories A natural classification is by value added from manufacturing (the values are added to inventories at each level of the manufacturing operations, finally all values are cumulated with finished goods): • Raw materials-Resources required in the production or processing activity of the firm. • Components-Raw materials or subassemblies that will later be included into a final product. • Work-in-process (WIP)-the inventory either waiting in the system for processing or being processed. It may includes component inventories and some raw materials; the level of WIP is taken as a measure of the efficiency of a production scheduling system. JIT aims at reducing WIP to zero. •Finished good-also known as end items-the final products