What are 'Finished goods' in inventory management?

Finished goods in inventory management refer to products that have been fully manufactured and are ready for sale but have not yet been sold to customers. This stage in the inventory process signifies that the goods have completed all stages of production, including any necessary quality checks, packaging, and are available for distribution or sale.

In a business context, finished goods are critical assets, representing the culmination of the production process and indicating that the company has completed its manufacturing cycle for these products. This classification helps companies manage inventory effectively, ensuring they have adequate stock to meet customer demand while also understanding the value of goods ready to generate sales.

The other options do not meet the definition of finished goods. Partly finished items pending quality checks represent work-in-progress inventory. Products that have never been manufactured cannot be considered finished goods since they do not exist in any completed form. Raw materials waiting to be used in production are also not finished goods as they are the foundational inputs of the manufacturing process.