The term 'indirect supplies' refers to which inventory category?

The term 'indirect supplies' specifically refers to supplies that are necessary for the daily operations of a business but are not part of the final products that the company offers to its customers. These supplies support the overall functioning of the organization, providing essential services and maintenance, but do not directly contribute to the end goods produced for sale. Examples might include office supplies, cleaning materials, and maintenance tools, which facilitate operations but do not become part of the manufactured goods.

Understanding this distinction is important in inventory management, as it helps categorize assets correctly within a company’s resource planning and procurement strategies, ensuring the smooth operation of both manufacturing and administrative processes.