Item Classs vs Item Template Best Practice of Use

Summary

Item Classs vs Item Template Best Practice of Use

Content

I have a scenario like this, want to know the best practice and suggestions 

I have several item type in my business as follows ( let us assume ), there is no hierarchy exist any of these type of items and they have their own set of attributes as per the Oracle Templates

1. Finished Goods
2. Purchased Item
3. ATO
4. KIT

Oracle has templates for them. Which option will be better to define as Item class

Option 1

Root Item Class and define below 4 item class under the Root Item class and then apply template for corresponding items under each item class under defined under the root item class