what is finished goods inventory

what is finished goods inventory refers to products that have completed the manufacturing process and are ready for sale or distribution to customers. Finished goods are the final stage of production before the products are shipped out for retail or direct consumer purchase. Companies maintain finished goods inventory to ensure they can meet customer demand without delays. This inventory is critical for businesses because it helps in forecasting sales, managing stock levels, and avoiding shortages. Effective management of finished goods inventory is essential for businesses to ensure that products are available for sale while minimizing storage costs.