Classification of industrial product

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Classification of industrial product

  1. 1. Classification Of Industrial Product Industrial products and services are classified into three broad groups. (1) Material and Parts ( These goods enter the product directly) • Raw Material ( Basic Products like iron ore, crude oil, fruits, vegetables ) • Manufactured Items ( Acids ,fuel oil, steel, chemicals) • Components Parts ( semi finished parts like bearings ,TV Tubes , small motors , tyres) • Subassemblies ( semi finished goods like exhaust pipe in motorcycle)
  2. 2. • Raw Materials- These are basic products that enter the production process with little or no alterations. • Manufactured Materials and Component Parts -- Manufactured materials include those raw material that are subjected to some amount of processing before entering the manufacturing process. • Component Parts – These parts can be installed directly into products with little or no additional changes
  3. 3. (2) Capital Items A capital good is a durable good (is a good that does not quickly wear out) that is used in production of goods or services. These goods are used in production process. • Light equipment or accessories ( Hand tools, computer terminals.) • Installations or heavy equipment's ( machines , turbines) • Plant and building ( Offices ,plants, warehouses, parking lots , housing, which are real estate property)
  4. 4. • Light equipment or accessories- Those tools which have lower purchase prices and are not considered as part of heavy equipment's. • Installations /Heavy equipment- These are major and long term investment .These items are shown in balance sheet as plant & equipment’s and treated as fixed assets. • Plant and buildings – These are the real estate property of a company. It includes firm’s offices , plants (factories) , ware houses and so on.
  5. 5. (3) Supplies and Services These goods /services support the operations • Supplies – These are operating maintenance supplies like fuels , packaging materials, lubricants, paints, electrical items • Services – Companies need a wide range of services like Legal ,auditing, advertising, courier, marketing research agency

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