Item Master File: Definition & Contents

Item Master File: Definition & Contents
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Lesson Transcript
Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

In this lesson, you will see what an item master file is and why it is so useful. You'll learn what kinds of information are contained in an item master file and how the information can be used.


Large businesses that make products will usually have an item master list. This list contains all the information they need to know for each item that the business has. The item master list can contain supply items as well as finished product items. Let's take a look at a toy company to see how they use an item master list to help them run their business.

This is the company Bricks. They make those miniature building blocks that snap together. The bricks come in all kinds of colors and shapes. Bricks uses an item master file to keep track of all the materials or supplies that go into making their bricks, as well as all the finished bricks that they have on hand. This way, they know exactly how much material they have on hand to make more bricks and how many bricks they have to sell.

Large companies like Bricks use an item master list to help them with operations.


Each item on their item master file contains the following key bits of information:

  1. Item name
  2. Item type
  3. Cost/Price
  4. Location
  5. Quantity

The item master file for the company Bricks contains all the information they need to operate their business. Each business is unique, so other businesses may have other key bits of information that they need to operate their business. The purpose of the item master list is to keep a record of all the items that a company uses and has so that items can be purchased and/or made when they get used up. It also keeps all their items organized so that when customers call to place orders, they can tell them exactly how many of each item they have on hand to ship out right away.

For the company Bricks, they need to know the name of the item along with the item type, whether it is a supply item or a product item. Bricks also needs to know how much the supply item costs or how much the product item is selling for. The company also needs to know the location of the item and how much is left. The company has a table that contains all this information. Each item has its own line in the table.


For example, for the blue dye that is used to make their blue bricks, the company Bricks has this line on its item master list.

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