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.

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in the value of a FIXED ASSET because of a significant change in demand or technology which renders the asset out of date, or comparatively inefficient.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

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.

References in periodicals archive ?
At his company, the approach to managing IT obsolescence was somewhere between that of CNA and Pic 'N Pay.
As a result, they tend to clog a system with high inventories of the "wrong" products, impairing service and increasing obsolescence.
The book quotes Peter Blake, editor of Architectural Forum, who blamed the 1954 tax code's accelerated depreciation rate, which was meant to encourage development with a quick write-off, but "all of a sudden an owner was rewarded for selling out fast!" (page 110) To give a sense of the times, Abramson offers quotes from the post-war growth era, such as "Yesterday's house is as obsolete as yesterday's car" (page 66, from year 1959); article titles such as "Expendability: Towards Throwaway Architecture" (page 71, from year 1963); and publication titles such as Kinetic Architecture (page 76, from mid-1960s), all of which demonstrate the new obsolescence thinking.
The French decree is part of a wider movement against planned and built-in obsolescence across the EU.
Therefore, some allowance should be given to account for this economic obsolescence. [Kansas Star's appraiser's] report indicated that the arena was over built by two thirds; consequently, the 52% economic obsolescence figure used by [Kansas Star's appraiser] should be reduced by a third to 35%.
The French law defines planned obsolescence as the range of techniques used by a company responsible for placing a product on the market to deliberately reduce the lifespan of a product to increase replacement rates.
The post French prosecutor launches probe into Apple planned obsolescence appeared first on Cyprus Mail .
The basic procedure used will be to set out the logic of different ways of handling capital embodied technical progress, pointing out that adjusting investment for costless quality improvements, and reducing old capital for obsolescence, and both mechanisms for handling the higher quality of new goods arising from capital embodied progress.
Managing the risks associated with PLM solution and data obsolescence within the Aerospace & Defense (A&D) industry, and other industries, is a large and growing problem.
It defines DMSMS as "the loss, or impending loss, of manufacturers or suppliers of items, raw materials, or software." The SD-22 also defines DMSMS management as "a multidisciplinary process to identify issues resulting from obsolescence, loss of manufacturing sources, or material shortages; to assess the potential for negative impacts on schedule and/or readiness; to analyze potential mitigation strategies; and then to implement the most cost-effective strategy."
In the public debate, this development is commonly attributed to a phenomenon known as planned obsolescence, which may be defined as "the outcome of a deliberate decision by suppliers that a product should no longer be functional or desirable after a predetermined period" (Cooper 2010, p.4).
While the redesign of the CDU was initially prompted to eliminate parts obsolescence, the application of modern Commercial Off-The-Shelf (COTS) processors also provides several industry standard interfaces that allow for future expansion and additional interoperability with other aircraft systems.