Basic Good: Basic good which itself may not have utility but other good derived from it have that utility. For example, cotton / textile is a basic good because apparels made from it has utility. In other sense, bulk or raw material produced in agriculture, manufacture or construction used for further production of new items. These raw materials are called basic goods.
Intermediate Goods: Intermediate good is incomplete good which goes as input for further finishing. Thus, in production chain, Intermediate goods lie between raw material and finished goods.
Raw material: The term raw material refers to both basic and intermediate goods, which are used as input to produce finished goods. That means till a final product is produced completely all the materials used in production chain are called raw material.
Finished Goods: A Finished goods has completed required manufacturing and is ready to provide its utility. Finished goods are ready to be consumed or distributed.
Capital Goods: The term Capital Goods is used for manufacturing plants, machinery and other assets which are used for conversion of basic goods to finished goods. Further, a Capital Good itself is a finished good because it itself does not need any further processing. But this finished good is usd to produce another good.
Consumer Goods: Consumer goods are generally, not always “Finished Goods” as they are ready to use without undergoing further processing or changes. There may be some consumer goods which need further processing – for example cloth, that needs to be sent to a tailor, is a consumer good but also an intermediate good. There are two main categories of consumer goods viz.
- Consumer Durable Goods and Consumer Non-durable Goods. Consumer Durable Goods (aka. Consumer Durables): The non-perishable goods such as electronics come under the category of Consumer durables. Such goods don’t need to be purchased frequently because they are made to last for long period, at least three years. They are generally of higher price in comparison to the non-durables.
- Consumer Non-durable Goods (aka. Consumer Non-durables): The perishable goods such as fruits, vegetables, cosmetics, food items etc. which we need to purchase frequently are consumer non-durables.