Work in process: Difference between revisions

Revision as of 12:32, 22 March 2024

Revision as of 12:35, 22 March 2024

Line 3:

'''Work in process''' or '''work-in-process''', ('''WIP'''),<ref name="yourdictionary">{{cite web|url=http://business.yourdictionary.com/work-in-process|title=Work-in-process dictionary definition &#124; work-in-process defined|publisher=business.yourdictionary.com|access-date=2014-07-12}}</ref><ref name="ventureline">{{cite web|url=http://www.ventureline.com/accounting-glossary/w/work-in-process-definition/|title=WORK IN PROCESS DEFINITION|publisher=ventureline.com|access-date=2014-07-12}}</ref><ref name="businessdictionary">{{cite web|url=http://www.businessdictionary.com/definition/work-in-process.html|title=What is work in process? definition and meaning|publisher=businessdictionary.com|access-date=2014-07-12|archive-date=2019-12-05|archive-url=https://web.archive.org/web/20191205005123/http://www.businessdictionary.com/definition/work-in-process.html|url-status=dead}}</ref><ref name="thefreedictionary">{{cite web|url=http://financial-dictionary.thefreedictionary.com/work+in+process|title=Work in Process financial definition of Work in Process|publisher=financial-dictionary.thefreedictionary.com|access-date=2014-07-12}}</ref> '''work in progress''' ('''WIP'''),<ref name="collinsdictionary">{{cite web|url=http://www.collinsdictionary.com/dictionary/english/workinprogress|title=Collins English Dictionary &#124; Always Free Online|publisher=collinsdictionary.com|access-date=2014-07-12}}</ref><ref name="investopedia">{{cite web|url=http://www.investopedia.com/terms/w/workinprogress.asp|title=Work In Progress (WIP) Definition &#124; Investopedia|publisher=investopedia.com|access-date=2014-07-12}}</ref><ref name="ventureline2">{{cite web|title=What Is Work-In-Progress (WIP)? {{!}} Finance Strategists|url=https://www.financestrategists.com/terms/work-in-progress/|access-date=2020-11-11|website=Finance Strategists|publisher=financestrategists.com}}</ref> '''goods in process''',<ref name="yourdictionary"/> or '''in-process inventory''' refers to a company's partially finished goods waiting for completion and eventual sale, or the value of these items.<ref name="tuition">{{cite web|url=http://www.tuition.com.hk/dictionary/w.htm|title=W - Wage to WTO (World Trade Organisation) - Dictionary|publisher=tuition.com.hk|access-date=2014-07-12}}</ref> The term is used in [[supply chain management]], and WIP is a key input for calculating inventory on a company's balance sheet. In [[lean thinking]], inappropriate processing or excessive processing of goods or work in process, "doing more than is necessary", is seen as one of the seven wastes (Japanese term: ''[[Muda (Japanese term)|muda]]'') which do not add value to a product.<ref>EKU Online, [https://safetymanagement.eku.edu/blog/the-seven-wastes-of-lean-manufacturing/ The Seven Wastes of Lean Manufacturing], ''Eastern Kentucky University'', accessed 6 March 2023</ref><ref>McDonald, M. P., [https://blogs.gartner.com/mark-mcdonald/2009/10/09/inappropriate-processing-muda-matters-in-it/ Inappropriate Processing: Muda matters in IT], ''Gartner'', published 9 October 2009, accessed 7 March 2023</ref>

== Tracklisting ==

== WIP inventory in supply chain management ==

The project contains only 4 songs and is approximately 15 minutes and 15 seconds long

WIP inventory calculations can help a company assess their supply chain health and guide in supply chain planning.<ref name=":0">{{Cite web |date=2021-08-25 |title=What is Work in Process (WIP) Inventory & How to Calculate It |url=https://ware2go.co/work-in-process-inventory/ |access-date=2022-07-13 |website=Ware2Go |language=en-US}}</ref> In most cases, it is ideal to have low WIP inventory levels,<ref name=":0" /> and companies that manage their inventory level efficiently tend to have lower costs.<ref name=":1">{{Cite web |date=2019-04-23 |title=What is Work in Process (WIP) in logistics? - SCM EDU |url=https://scmedu.org/workinprocess_wip_/ |access-date=2022-07-13 |language=en-US}}</ref> Managing WIP inventory requires coordination between several functions within a company, as well as with suppliers and customers.<ref name=":1" /> Higher WIP inventory levels are advantageous in that they can support a surge in demand, as well as improve cycle time since there is more material in production. However, this can also increase storage costs and obsolescence risk, as well as lead to waste if demand is lower than expected.<ref>{{Cite web |date=2020-10-26 |title=WIP Inventory {{!}} Advantages and Disadvantages of WIP Inventory |url=https://www.educba.com/wip-inventory/ |access-date=2022-07-13 |website=EDUCBA |language=en-US}}</ref> To mitigate these risks, companies are increasingly turning to demand forecasting software. These tools analyze historical data, market trends, and customer behavior to predict future demand with greater accuracy. This allows companies to optimize WIP levels, ensuring they have enough material to meet anticipated demand without carrying excessive inventory that could become obsolete.<ref name="Demand Forecasting Software">{{cite web |last1=Dekhne |first1=Ashutosh |last2=Lange |first2=Tim |last3=Magnus |first3=Karl-Hendrik |last4=Scheringer |first4=Isabell |last5=Vincken |first5=Simon |title=Retail and Consumer Packaged Goods:Better service with connected inventory |url=https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/Better%20service%20with%20connected%20inventory/Better-service-with-connected-inventory.pdf |website=McKinsey.com |publisher=McKinsey & Company}}</ref>

1)Dive

2)Down Swinging

3)Work in Progress

4)Easy Tiger

== WIP inventory in accounting ==

WIP inventory refers to goods that are in production and not yet a finished good.<ref>{{Cite web |title=What Work-in-Progress Really Means |url=https://www.investopedia.com/terms/w/workinprogress.asp |access-date=2022-07-13 |website=Investopedia |language=en}}</ref> On the balance sheet, WIP inventory is aggregated into the inventory line under current assets along with raw materials and finished goods.<ref>{{Cite web |first=Jeff|last=Schmidt|title=Inventory |url=https://corporatefinanceinstitute.com/resources/knowledge/accounting/inventory/ |access-date=2023-03-07 |website=Corporate Finance Institute |language=en-US}}</ref>

To calculate WIP inventory at the end of an accounting period, the following 3 figures are required: beginning WIP inventory, production costs, and finished goods. Beginning WIP inventory is the WIP inventory figure from the previous accounting period. Production costs includes all costs associated with manufacturing a product, such as raw materials, labor, and overhead costs. Finished goods is the total value of goods ready for sale in the current accounting period. The formula for calculating WIP inventory is as follows: beginning WIP inventory + production costs – finished goods.<ref name=":0">{{Cite web |date=2021-08-25 |title=What is Work in Process (WIP) Inventory & How to Calculate It |url=https://ware2go.co/work-in-process-inventory/ |access-date=2022-07-13 |website=Ware2Go |language=en-US}}</ref>

==Tax treatment==