A material record is required to hold the details of each raw material you use to make your products. You cannot buy a material until you have defined its material record. In this context, a raw material is something you buy. Once bought you may directly re-sell it, in whole or in part, or use it in the manufacture of something else.
There are essentially 3 types of raw material you can define, although there are many variations on each type. The add procedure is slightly different for each type.
A 0D type represents 'whole' things, or objects, you either have one or you do not, you don't normally have part of it.
A 1D type represents something that can be divided up in one dimension, e.g. a bar can be cut to length.
A 2D type represents something that can be divided up in two dimensions, e.g. a sheet can be cut along its length and its width.