Benefits in Work-in·Process

The inventory of work in process performs two functions. In the first place, it is necessary because production processes are not instantaneous. The amount of such inventory depends upon technology and the efficiency of production. The larger the steps involved in the production process, the larger the work-in-process inventory and vice-versa. By shortening the production time, efficiency of the production process can be improved and the size of this type of inventory reduced. In a multi stage production process, the work in process inventory serves a second purpose also. It uncouples the various stages of production so that all of them do not have to be performed at the same rate. The stages involving higher set up may be most efficiently performed in batches with a work in process inventory accumulated during a production run.

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