The five primary functions of inventory are pipeline inventory, cycle stocks, seasonal inventories, safety stocks, and decoupling stocks.
Inventories consist of raw material, work-in-process and finished goods which are held by a business in ordinary course of business, either for sale or for the purpose of using them in the process of producing goods and services. Raw material is a type of inventory which acts as the basic constituent of a product.
Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company's balance sheet, and it serves as a buffer between manufacturing and order fulfillment.