By convention, manufacturing inventory generally refers to items that contribute to
or become part of a fi rm’s product output. Manufacturing inventory is typically classifi
ed into raw materials, fi nished products, component parts, supplies , and work-in-process.
In distribution, inventory is classifi ed as in-transit , meaning that it is being moved
in the system, and warehouse , which is inventory in a warehouse or distribution center.
Retail sites carry inventory for immediate sale to customers. In services, inventory generally
refers to the tangible goods to be sold and the supplies necessary to administer
the service.