Raw materials - Bought from suppliers and issued to cost centres to make products, Work in progress - Units that have been started but are incomplete at the end of the accounting period, Finished goods - Goods ready to sell to customers, FIFO - Issues to stock production are made from oldest stock first, stock is made up of most recent purchases, LIFO - Issues to stock are made from the newest stock first, stock is made up of oldest purchased., AVCO - Assumes that the issues into production will be made at an average price, calculated immediately before the issue is made, Buffer inventory - The minimum level of inventory to hold to avoid stock-outs, Reorder level - The level of inventory at which and needs to be placed, Reorder quantity - The amount that will be ordered, Economic order quantity (EOQ) - The optimum order quantity, Lead time - Awareness of how long it will take for goods ordered to arrive,

Inventory definitions

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