Obsolete inventory can be easily summed up by referring it to inventory that is no longer in need or is outdated. Obsolete inventory’s example would be if you as the manufacturer have a speaker in your product line and after some time other similar products with more added features and benefits come into the market at a much discounted price – then your merchandise becomes obsolete in the world of supply chain. Another example of obsolete inventory can be if your product is no longer relevant into the market. Cassette players for example are considered to be obsolete merchandise because the production of cassette tapes is no longer in production.
Therefore, if you have a stock of cassette players, you wouldn’t call this inventory excess – the better term to define this inventory would be obsolete.