How are obsolete items defined?

Obsolete items are defined as those that are no longer needed or in demand. This definition encapsulates the understanding that obsolescence typically occurs when a product has fallen out of favor due to changes in technology, consumer preferences, or market conditions. When an item is obsolete, it may still exist in stock, but it is unlikely to be sold or utilized in the foreseeable future, which can create issues for inventory management and resource allocation.

Understanding obsolescence is crucial in material management, as it affects inventory turnover rates and the overall efficiency of the supply chain. Identifying and managing obsolete items can help organizations streamline their operations and minimize the costs associated with holding non-essential inventory.