Here's what you should have in your inventory for best results:
Left Side:
Bullets
Lighter (you get this later, like Ch 3)
Bandages (in case you bleed out, plus can be used to make Molotovs, bandages burn slower)
Tape (to make sticky bombs)
Batteries (flashlight)
Eventually you'll get another story item (Lens) -- swap it with Tape
Right Side:
Two flammable bottles (glass or plastic, doesnt matter, used to make Fire Bullets, or blow open doors or group of humanZ)
Healing Spray
Anti Rust Spray or Mosquito Spray (used in conjunction with lighter to make flamethrower, destroys Humanz with extreme ease)
Dont bother using Glowsticks or Flares, or Blood Packs. Also dont bother combining. There are only certain situations where you might need to make a certain product, and when that happens, the game will simply stash a ton of items in a room nearby for you to fish through.
There's also an upgraded gun (Magnum) in the first fuzzy circle you see on the map (Chapter 3 I believe) -- these fuzzy circles are required for the best ending, I think. You have to burn all the roots of evil.