Reading Time: 4 minutesDefinitionThe definition of inventory changes slightly depending on the industry. Here’s a small list of definitions:Most common definitionInventory refers to all the items, goods, merchandise, and materials held by a businessfor selling in the market to earn a profit.Example: If a newspaper vendor uses a vehicle to deliver newspapers to the customers, only the newspaper will be considered inventory. The vehicle will be treatedas an asset.Manufacturing industryIn a manufacturing business, inventoryis not only the final product manufactured and ready to sell, but also the raw materials used inproduction and the semi-finished goodsin the warehouse oron thefactory floor.Example:For acookie manufacturer, inventory will include thepackets ofcookiesthat are ready to sell,thesemi-finished stock ofcookies that haven’t been cooled or packed yet, thecookiesset aside for quality checking, and raw materials like sugar, milk,andflour.Service industryIn a service industry, sin...
