(1) Raw Materials are primary materials or substances that form the basis of manufactured goods, and include natural resources from mining, forestry, agricultural and fishing sources. (2) From the point of view of a manufacturer, Raw Materials are the materials it buys to convert into products – for example, a metal furniture manufacturer will see sheet metal as a raw material.
Raw Materials Turn Rate is also named raw materials turnover, raw materials inventory turnover, commodity turnover and raw materials turnover ratio. It measures the rate at which raw material inventory is used and replaced. It helps characterise a company’s forecasting and inventory management. It is the ratio between cost of goods sold (COGS) in a time period, and the average cost of raw materials inventory in that period.