This policy establishes guidelines for inventory valuation, adjustments, reserves and disposition. The scope of this sample policy applies to all company inventory items: raw stock, work-in-process (WIP), finished goods and inventory at subcontractors.
In this example, all company inventories are properly planned for to ensure accuracy for raw stock, WIP and finished goods acquired for company projects for the eventual sale to customers. Evaluating inventory reserves involves reviewing and identifying company scrap materials and slow moving, excess, and obsolete inventory in order to estimate the proper amount on a quarterly basis. Quarterly, company management reviews system reports to identify scrap, slow moving, excess and obsolete inventory.