What type of inventory refers to goods in transit that are owned by the firm?

In-transit inventory refers specifically to goods that are being transported from one location to another but are still owned by the company. This type of inventory is crucial in supply chain management, as it represents goods that are on their way to be sold or used but have not yet reached their final destination.

Understanding in-transit inventory is important because it impacts a company's inventory management and cash flow. Even though these goods are not physically present in a warehouse, they still count towards the overall inventory valuation and are managed as part of the company's assets. This inventory type highlights the importance of efficient logistics and transportation systems to minimize delays and manage lead times effectively.

Other types of inventory mentioned, such as safety inventory, cycle inventory, and anticipation inventory, serve different purposes. Safety inventory is held to mitigate the risk of stockouts, cycle inventory reflects the portion of inventory that is regularly sold or used and replenished, and anticipation inventory is maintained to meet expected fluctuations in demand. Each serves distinct strategic roles, making in-transit inventory uniquely defined by its status of being in motion on behalf of the firm.