Because companies focus primarily on new product development and promotion, the problem of excess and obsolete inventory, once addressed, often leads to both the inventory and dollars flying out the door. There should be smarter ways of handling this problem.
analysis of eol impact
some excess inventory, profitability analysis reflects not only the margin impact of discounting, but the significant overhead costs of program management to develop, launch, and manage each distinct program as well. Hidden are the costs of claims matching, invoice reconciliation, credit resolution, and write-offs. Creating hefty financial reserves against product obsolescence, writing off the inventory, and ultimately recovering only a small fraction of the original value is the inevitable result of