Finance questions

What is inventory?
What are the different types of inventory classifications?
Is inventory management important?

I just need the opinion on an expert in this area.

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...s inventory you might have:

Raw materials: Eggs, sugar, flour, etc.
Work-In-Process: Cake batter (Eggs, sugar, flour, etc. combined in appropriate ratios, with some labor exerted to measure, mix, etc.) This cake is not yet saleable, but it is moving toward that goal.
Finished goods: Baked and iced cake ready to be sold to the grocer. (All expenses related to the baking including labor and overhead such as electricity, oven time, packaging etc. have been applied to the costs associated with this finished cake.)

For a Retailer, the inventory consists of cakes purchasd from the manufacturer (baker) to be sold to the consuming public. The costs associated with this cake for the retailer include ...