Raw materials are the basic, unprocessed goods used in the production of products. These are the essential inputs that are transformed during the manufacturing process to create finished products. Examples include wood for making furniture, crude oil for producing petrol, or cotton for fabric manufacturing.
Understanding raw materials is crucial for businesses, as the quality and cost of these materials can significantly affect production efficiency, product pricing, and overall profitability. Managing raw materials effectively ensures a steady supply chain and can influence a firm’s competitive advantage in the market.
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