What does WIP mean in Accounting?
This page is about the meanings of the acronym/abbreviation/shorthand WIP in the Business field in general and in the Accounting terminology in particular.
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What does WIP mean?
- Work in process
- Work in process, work in progress, goods in process, or in-process inventory are a company's partially finished goods waiting for completion and eventual sale or the value of these items. These items are either just being fabricated or waiting for further processing in a queue or a buffer storage. The term is used in production and supply chain management. Optimal production management aims to minimize work in process. Work in process requires storage space, represents bound capital not available for investment and carries an inherent risk of earlier expiration of shelf life of the products. A queue leading to a production step shows that the step is well buffered for shortage in supplies from preceding steps, but may also indicate insufficient capacity to process the output from these preceding steps. Just-in-time production is a concept to reduce work in process with respect to a continuous configuration of product. Just in sequence is a similar concept with respect to a scheduled variety in sequence of configurations for products. Barcode and RFID identification can be used to identify work items in process flow. For locating the products additional requirements must be considered to ensure not only presence of work items, but also knowledge of the whereabouts of these items. This is a mandatory condition in flexible production lines with paralleled work positions for single steps of production.