Raw Materials

The raw materials purchase category includes items such as petroleum, coal, and lumber, and metals such as copper and zinc. It can also include agricultural raw materials such as soybeans and cotton. A key characteristic of a raw material is a lack of processing by the supplier into a newly formed product. Any processing that occurs makes the raw material saleable. For example, copper requires refining to remove impurities from the metal. Another key characteristic is that raw materials are not of equal quality. Different types of coal, for example, can differ by sulfur content. Raw materials often receive a grade indicating the quality level. This allows raw materials purchases based on the required grade.