Raw Material- Purchased but not processed
2. Work in process (WIP)- undergones some change but not completed.
3. Maintenance/repair/operating (MRO)- Necessary to keep machinery and proceses productive.
4.Finished goods- completed product awaiting shipment
Separate various parts of the production process
2. protect against stockouts and backorders
3. take advantage of quantity discounts
4. hedge against inflation