ERP Term
"Raw Materials "

Raw Materials are items used in a finished good or subassembly manufacturing process.

Raw materials are items used in the manufacturing process of a finished good or subassembly. Raw materials can be classified into two categories:  

  • direct and
  • indirect.

Direct raw materials become part of the finished product, while indirect raw materials are used in manufacturing but not directly incorporated into the final product.  

The term "raw materials" can also refer to natural resources such as timber, minerals, or oil used to produce manufactured goods. 

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