An intermediate good is an object ( good ) that is used to make a final product that will then be marketed (sold). Eg wood, flour.It is said that a good is intermediate when it requires some degree of modification, or when it is used within the production chain of another good.
It is also common to use the word intermediate goods as a synonym for intermediate inputs . There are two types of intermediate good :
- When the good is intermediate because it undergoes some modification for its consumption . For example, wood that is cut, polished and subjected to certain chemicals for its conservation and elaboration of wooden furniture .
- When the good is in the intermediate stage for the production of other products (final goods). For example, flour, oil, water, salt and sugar that are used to make the dough to prepare pizzas that will then be marketed. In this case it is an intermediate good because it is used in the production of other goods to reach the final goods.
Goods and services
While it is true that goods in general lines can be tangible (objects) as intangible (which cannot be measured or touched) it is important to make a clarification: An intermediate good is always an object . In economics, it is often indicated that goods are divided into products and services.
See also: Examples of tangible and intangible assets
For example, a car is not only bought by the car itself (product) but also bought by the brand, after-sales service, the attention received, payment plans, insurance included, patent and some extra benefits that The purchase may have. The latter is called service since it is not tangible but accompanies this product or final .
In the case of intermediate goods , these can never be a service . That is, always an intermediate good is and will be a product since it is part of the production chain.
It is important to make a distinction between a final good of consumption and an intermediate good of consumption since both terms are easy to confuse.
For example, eggs consumed in the home for the preparation of a meal are not intermediate goods. They are final consumer goods . However, the flour that is used for the preparation of meals that will then be put up for sale in a business, is very intermediate consumption .
See also: What are the capital goods?
Examples of intermediate goods
- Steel . For the elaboration of beams and building construction elements.
- Water. Provided that it is used in the process of making another good for sale or exchange.
- Cotton. For the elaboration of fabrics.
- Clay. For the manufacture of bricks.
- Silica sand . For the manufacture of glass.
- Sugar and milk . For the production of dulce de leche with which they will then be made of cakes or sweet doughs. In certain countries of Central America this candy is known as caramel candy.
- Sugar . Since with sugar you can make multiple sweet dishes, sweet and sour foods and desserts if mixed with water.
- Bicycle . If a bicycle is used for the transport of an employee, for example a mailman. In other words, if the shot is used as a work tool, then it is an intermediate good.
- Sugarcane . For the manufacture of sugar.
- Coal . For the preparation of pencils, refractory crucibles and lubricating products.
- Cardboard . When this cardboard serves as input in the company or as packaging of the final product.
- Cement . For the manufacture of houses.
- Copper. To produce integrated circuits that will then be part of different objects such as cell phones.
- Leather. For the manufacture of clothing or footwear.
- Fruits. If used for, for example, the making of jams or jellies.
- Sunflower. Sunflower oil and seeds are extracted from the plant. This oil, in turn, is used to make other products.
- Grain. For the preparation of baked goods for sale.
- Flour. When it serves as part of any of the ingredients for the manufacture of a food that will be marketed later.
- Eggs They are also generally used for the preparation of various dishes.
- Pencils and papers that are used in an office.
- Latex : For the manufacture of rubber.
- Milk. If it is used to make yogurt, cheese, smoothies, etc.
- Wood . It is an intermediate good because it is used for the manufacture of furniture or real estate.
- Sewing machine . Whenever it is used for the elaboration of clothing to sell.
- Paper. When these are used as wrapping of a final product.
- Petroleum. For the preparation of gasoline (gasoline).
- Plastic. For the preparation of containers with drinks or food.
- Wheels or parts of a vehicle . When what is sold is the car.
- Drills, industry tools. Provided they are used for the manufacture of furniture or things for sale.
- Wheat for the manufacture of flour.