obsolescence

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Obsolescence

The circumstance in which a good or service is no longer desired, especially when a new, better good or service becomes available. For example, relatively few people use VHS tapes because DVDs are both more convenient and are higher quality. VHS tapes, then, have undergone obsolescence. Some companies deliberately render their products obsolete because it makes customers more likely to come back and buy new products. See also: Planned obsolescence.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

obsolescence

  1. the tendency for products to become outmoded and to reach the end of their effective PRODUCT LIFE CYCLE. Obsolescence may be due to changes in style, fashion, materials used and the functions performed. With rapidly advancing technology and more fickle public tastes, product life cycles are tending to shorten as new, more sophisticated products supersede established products. Firms may respond by frequently updating their existing products in order to lengthen their life cycle. Alternatively, firms may deliberately follow a strategy of ‘planned obsolescence’ by bringing out a continuous stream of new products both to establish COMPETITIVE ADVANTAGE over rival suppliers, and to increase their total sales by inducing customers to replace products more frequently.

    See NEW-PRODUCT DEVELOPMENT, FASHION PRODUCT, PRODUCT STRATEGY.

  2. the reduction in the value of a FIXED ASSET because of a significant change in demand or technology which renders the asset out of date, or comparatively inefficient.

    Renting or LEASING plant, machinery and equipment avoids the risk of obsolescence, since at the end of the rental or lease period a firm may rent or lease a more modern fixed asset.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

obsolescence

A loss in value of an improvement because something makes it undesirable or no longer useful,even though it might be structurally sound.

• Functional obsolescence occurs because of factors within a property, such as a poor floor plan or lack of modern amenities. A three-bedroom, one-bathroom house with a one-car garage would generally be considered as suffering from functional obsolescence.

• Economic obsolescence, also called environmental obsolescence and external obsolescence, occurs because of factors outside a property. Examples include construction of an airport near a residential area or a change in highway access leaving a retail area stranded.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The Navy Obsolescence Management Working Group is working' to "coordinate" obsolescence management efforts, interact with the Defense Department DMSMS Working Group ...
The V-22 program office's OMT is guided by an obsolescence management plan that establishes a proactive process for predicting, identifying, and controlling obsolescence impacts that affect the program from conceptual design through retirement.
Obsolescence management is primarily a tool for reducing or avoiding downstream costs, rather than generating immediate savings.
Collaborating across the embedded supply chain, GDCA has developed the tools and systems to turn the costs and hardships of obsolescence management into an easily manageable business activity.
DCMA has provided APSS to PBL-related processes and capabilities, including supply chain management, demand forecasting, obsolescence management, logistics surveillance, and partnering arrangements.
Instead, each player is left facing inward -- focusing on solutions from their own particular positions in the supply chain: labs look for test solutions, distributors look to offer for proof of authenticity, researchers look for newer and more exotic authentication methods, and obsolescence management focuses on data integration and sourcing.
Collaborating across the embedded supply chain, GDCA develops innovative solutions for supporting legacy systems, effectively turning the costs and hardships of obsolescence management into an easily manageable business activity.