the central focus in this book is on flows through supply chain. one of the flows we have been discussing throughout this book is the physical flow of materials. "inventory" is another name for materials and is any materials that a firm holds in order to satisfy customer demand. figure 6.1 shoes inventory location throughout a supply chain. this illustration should give a sense of the ubiquitous nature of inventory, and the various forms in which it is held. supply chain hold raw materials are processed, but are not yet completely finished, they are called work in process. once the product is ready for shipment, they are finished goods. notice also the in transit inventory in figure 6.1 . this is inventory being moved from one location to another.