What Are Intermediate Goods? (With Examples) | Indeed.com

Intermediate goods are unfinished items that go into the production of other items. They are changed, combined or otherwise modified before ... FindjobsCompanyreviewsFindsalariesUploadyourresumeSigninSigninEmployers/PostJobStartofmaincontent CareerGuideCoronavirusJobResourcesFindingajobMoreResumes&coverlettersInterviewingStartingaNewJobResumeSamplesPay&SalaryCareerdevelopmentCareerPathsCoverLetterSamplesCoronavirusJobResourcesFindingajobResumes&coverlettersInterviewingStartingaNewJobMoreResumeSamplesPay&SalaryCareerdevelopmentCareerPathsCoverLetterSamplesCareerdevelopmentWhatAreIntermediateGoods?(WithExamples)WhatAreIntermediateGoods?(WithExamples)ByIndeedEditorialTeamMarch18,2021TwitterLinkedInFacebookEmailCopytoClipboardKnowinghowtheprocessofproductionworkscanbeanimportantpartofyourbusinessexpertise.Intermediategoodsareoneelementoftheproductionprocessbecausetheyarechangedorcombinedtocreatethefinalgoodsthatreachthecustomer.Inadditiontocreatingtheirownintermediategoods,industriesbuyandsellintermediategoodsamongthemselves.Inthisarticle,wediscussintermediategoodsandtheywork,giveexamplesofintermediategoodsandshowthedifferencebetweenintermediategoods,capitalgoodsandconsumergoods.Whatareintermediategoods?Intermediategoodsareunfinisheditemsthatgointotheproductionofotheritems.Theyarechanged,combinedorotherwisemodifiedbeforebecomingafinalproductthatthecustomerbuys.Forexample,aharddriveisanintermediategoodthatgoesintotheproductionofacomputer.Intermediategoodscanalsosometimesbesolddirectlytotheconsumerasfinalgoods.Somecompaniesmakeandusetheirownintermediategoods,somemakeintermediategoodstoselltootherindustriesandsomepurchaseintermediategoodsforuseintheirfinalproducts.Thisiswhytheyarealsosometimesreferredtoasproducergoods.Related:AllYouNeedToKnowAboutCostofGoodsManufacturedHowdointermediategoodswork?Intermediategoodsmightundergomorethanonetransformationbeforebecomingafinalproduct,andseveralintermediategoodscangointotheproductionofasingleconsumergood.Sometimes,theintermediategoodsthatgointoafinalproductincludeservice.Forexample,alivemusiciancouldbeconsideredanintermediategoodbecausethefinalproductisthemusictheycreate.Intermediategoodsarenotcalculatedintothegrossdomesticproductofacountry'seconomybecauseiftheydid,theywouldbecountedtwice:oncewhentheywereboughtorsoldas-isandagainwhenthefinalconsumerproductwassold.Astrategycalledthevalue-addedmethodisusedtocalculatehowmuchintermediategoodscontributetoacountry'sincome.Thismethoddeterminesaproduct'svalueduringeveryproductionstage.Related:UnderstandingEconomics:DefinitionandApplicationExamplesofintermediategoodsIntermediategoodsincludeallitemsthataremanufacturedandtradedtobetransformedintoadifferentfinalproductfortheconsumer.Someexamplesofintermediategoodsinclude:Salt:Saltisconsideredanintermediategoodbecauseitisincludedinthefinalproductofmanyfoodandnon-fooditems.Wheat:Likesalt,wheatisanintermediategoodbecauseitisprocessedtobeusedaspartofanotherproduct,usuallyfoodorfood-related.Glass:Glassisanintermediategoodbecauseitisusedinmanyotherfinishedproducts,suchaswindowsanddoors,thatfundamentallytransformitspurpose.Steel:Steelisanotherintermediategoodthatisusedtocreatefinalgoodsinmanyindustries,suchasconstructionandtransportation.Wood:Woodisawidelyusedintermediategoodthatisprocessedinmanywaysforhouseholditemsandconstructionmaterials.Preciousmetals:Metalssuchassilverandgoldareprocessedasintermediategoodsandcontributetodifferentfinalproductssuchasjewelryandaccessories.Someelectronicitems,suchassolarpanels,alsousepreciousmetals.Carparts:Themanypartsthatgointotheproductionofcarsandtrucksareconsideredintermediategoodssincetheyaresignificantlytransformedwhencombinedtomakeafinalproduct.Paint:Paintandotherdecorativeitemsandsubstancesareconsideredintermediategoodsbecausetheyareoftenappliedtoacompany'sfinalgoodsaspartoftheproductionprocess.Hardware:Hardwareandfittingsareconsideredintermediategoodswhentheyarecombinedandtransformedintoafinalconsumergood.Manyoftheseintermediategoodscanalsobesolddirectlytotheconsumerasafinalproduct.Theyareconsideredintermediategoodswhentheyareusedtoproduceanotherdistinguishableitemforsale.Forexample,ifsomeonebuyswoodtobuildabookcase,thenthewoodisafinalproduct.Ifsomeonebuysabookcase,thenthewoodthatgoesintoitwouldbeanintermediateproductthathelpedproducethefinalproduct.Related:TypesofConsumerProducts:ListandExamplesIntermediategoodsvs.capitalgoodsIntermediategoodsaredifferentfromcapitalgoods,althoughbothkindsofitemscontributetotheproductionofabusiness'sfinalconsumergoods.Intermediategoodsaremosteasilyrecognizedastheconsumableitemsthatgointotheproductionofaproduct,suchasthesteelthatgoesintoacarorthesaltthatgoesintopotatochips.Capitalgoods,however,areitemsthatarerequiredtosupporttheproductionprocess.Forexample,theroboticarmusedinmakingcarsandtheconveyorbeltsusedtoprocesspotatochipsareconsideredcapitalgoods.Capitalgoodsalsoincludeitemsthatpeopleusetoprovideaserviceasafinalproduct.Forexample,abarber'sshearsorawebdesigner'scomputerwouldbeconsideredcapitalgoods.Sometimes,economistssortcapitalgoodsintothreecategoriesintheircalculations:durable,nondurableandservice.Durablecapitalgoodslastlongerthanthreeyears,nondurablecapitalgoodslastlessthanthreeyearsandservicegoodsareconsumedatthesametimetheyarecreated(suchasahaircut.)Intermediategoodsvs.consumergoodsFinalgoodsarealsosometimesreferredtoasconsumergoods.Consumergoodsdifferfromintermediategoodsinthattheycomprisetheintermediategoodsthatwentintotheirmanufacturing.Whensomeonepurchasesaconsumergood,theintentionisforthatproducttobeusedbythebuyerandnotasanelementoffurthermanufacturing.Examplesofconsumergoodsincludecars,computersandpowertools.Justasintermediategoodscansometimesoverlapwithfinalgoods,socanoneitembebothaconsumerandacapitalgood.Forexample,avehiclethatispurchasedbyacourierserviceforbusinessusewouldbeconsideredacapitalgood,whereasavehiclepurchasedbyafamilyforpersonalusewouldbeaconsumergood.Thedifferencebetweencapitalandconsumergoodsoftendependsonhowthatitemisbeingusedmorethantheitemitself.BrowsemorearticlesHowToBalanceYourScheduleWhenWorking70-HourWeeksWhatIsaPDF?ADefinitiveGuide(WithBenefits)WorkforceAnalytics:Definition,HowItWorksandTipsWhatIsaCustomer-DrivenCompanyandWhatDoesItDo?WhatToIncludeinaBiography13TypesofWorkQualityWithExamplesforEachWhatIsCodeQuality?(AndHowToMeasureIt)WhatIsCloseRate?Definition,FormulaandExamplesWhatIsReferralTraffic?(WithDefinitionandBenefits)FAQ:WhatIsCohortAnalysisandHowDoYouPerformOne?WhatIsUser-CenteredDesign?(WithRelevantPrinciples)WhatIsaSocialMediaHandle?(PlusTipsonHowToCreateOne)