Classification of industrial goods

There are three types of industrial goods. They are:

1. Entering goods.

2. Foundation goods.

3. Facilitating goods.

Classifications of these goods are identified below:

1. Entering goods: Entering goods are those which become a part of finished product. Their cost is an expense items that is assigned to the manufacturing process. This category of goods consists of raw materials and manufactured materials and parts.

a: Raw materials: they enter the production process of the buying organization basically in their natural state. It includes both farm products and natural products.

  

i. Farm products are wheat, cotton, livestock, fruits and vegetables.

ii. Natural product are fish, lumber, crude petroleum, iron etc.

b. Manufactured materials and parts: Manufactured materials and parts undergo more initial processing. It includes component materials and components parts.

    

 i. Component materials are steel, cement and wire.

           ii. Components parts are small motor, tiers and castings.

2. Foundation goods: Foundation goods are those which help the production process for the long time. It is the capital items. Their cost is depreciation expenses that are assigned to the production process as original cost. It includes-

a. Installation: It includes long term investment items which help the manufacturing process. Such as building, land, rights and fixed equipment (ex-generators, computers, elevators)

b. Accessory equipment: These products are generally less expensive and shorter lived capital items than installation and not considered as a part of fixed plant. Example; Portable or light equipment that means hand tools, lift trucks or office equipment such as type writer, desks.

3. Facilitating goods: Facilitating goods are those which not become part of finished product. It just supports organizational operation. It includes supplies and business services.

a. Supplies: Every organization requires-

         

i. Operating supplies like typing paper, lubricants.

          ii. Maintenance and repair items like paint, cleaning materials.

b. Business Services: Sometime organizations go outside for specialist to perform specific functions. It includes-

         

i. Maintenance and repair support like window cleaning machine.

          ii. Business advisory services like legal & management consulting, advertising etc.