INVENTORIES

As of the dates indicated, inventories are comprised of the following (in thousands):



	October 31,
	2017			2016
Raw materials	$	52,898		$	44,644
Work-in-process	18,623			12,852
Finished goods	185,488			156,402
Deferred cost of goods sold	61,340			59,856
	318,349			273,754
Provision for excess and obsolescence	(51,206		)	(62,503		)
	$	267,143		$	211,251

Ciena writes down its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand and market conditions. During fiscal 2017, Ciena recorded a provision for excess and obsolescence of $35.5 million, primarily related to a decrease in the forecasted demand for certain Converged Packet Optical products. During fiscal 2016, Ciena recorded a provision for excess and obsolescence of $33.7 million, primarily related to a decrease in the forecasted demand for certain Converged Packet Optical and Optical Transport products. During fiscal 2015, Ciena recorded a provision for excess and obsolescence of $26.8 million, primarily related to the discontinuance of certain parts and components used in the manufacture of its Converged Packet Optical products and a decrease in the forecasted demand for both its legacy, stand-alone WDM and SONET/SDH-based transport platforms and its 5410 Service Aggregation Switch. Deductions from the provision for excess and obsolete inventory relate to disposal activities.

The following table summarizes the activity in Ciena’s reserve for excess and obsolete inventory for the fiscal years indicated (in thousands):




Year ended	Beginning						Ending
October 31,	Balance		Provisions		Disposals		Balance
2015	$	60,126	$	26,846	$	33,971	$	53,001
2016	$	53,001	$	33,713	$	24,211	$	62,503
2017	$	62,503	$	35,459	$	46,756	$	51,206