1. Raw material stock
The term raw material does not necessarily mean material in its basic form, but can include previously manufactured components.
Example: Direct and raw material stock
When manufacturing a bedroom suite, the headboards could have been purchased ready-made. These ready-made headboards are then considered raw materials for the manufacturing of bedroom suites.
By far most raw material stock can be classified as direct material stock.
When manufacturing a single product, more than one type of raw material can be used.
Example: Direct and raw material
The steel, leather and sponge used in manufacturing an office chair are the raw materials. In this case it is the direct material.