Obsolescence

[3] Obsolescence frequently occurs because a replacement has become available that has, in sum, more advantages compared to the disadvantages incurred by maintaining or repairing the original.

In addition, obsolescence has been shown to appear for software, specifications, standards, processes, and soft resources, such as human skills.

It is highly important to implement and operate an active management of obsolescence to mitigate and avoid extreme costs.

For example, many integrated circuits, including CPUs, memory and even some relatively simple logic chips may no longer be produced because the technology has been superseded, their original developer has gone out of business or a competitor has bought them out and effectively killed off their products to remove competition.

[6] New York engineer Reginald P. Bolton attributed this phenomenon to "something new and better out-competing the old" and calculated the average architectural lifespan of varying building types in order to formulate a rough estimate for their impending obsolescence.

[6] For example, he suggested that hotels' obsolescence will occur faster than banks due to their ever-changing functions and tastes.

[7] Sometimes marketers deliberately introduce obsolescence into their product strategy, with the objective of generating long-term sales volume by reducing the time between repeat purchases.

Inventory obsolescence occurs when retailers and other vendors hold stocks for anticipated future sales which turn out to be too slow to materialise.

Holding excessive levels of stock or over-predicting potential demand increase the risks of products becoming obsolete and have a detrimental effect on the organisation's cash flow.