ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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False
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True
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Either A or B
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None of the above
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Detailed explanation-1: -Obsolete stock, also known as obsolete inventory, refers to items without demand for a sustained period. This is usually because they have reached the end of their product life cycle, so sales die out or because the items are no longer used in their supply chain.
Detailed explanation-2: -Obsolescence is referred to as the state of becoming obsolete. It is applied in the case of fixed assets in accounting which become obsolete at the end of their useful life.
Detailed explanation-3: -Obsolescence costs are incurred when an item in inventory becomes obsolete before it is sold or used. Inventory may become obsolete due to product design changes, changes in customer demand, or by remaining unsold after an acceptable shelf life.