Which of the following statements represent a definition for 'obsolescence' in inventory management? Select TWO that apply.

Your employers have expanded rapidly over the past five years and have acquired a number of smaller companies in the same industry. Unfortunately, all of the companies purchased have manual inventory systems. Your employer is setting up a computerised inventory control system and wishes to ensure that all stock is classified under the appropriate headings. Under what classification would semi-finished goods be classified?

A restaurant needs to buy a new freezer. The owner applies total cost of ownership model to calcu-late the life- time cost of the freezer. This equipment has a price tag of $1,000, the supplier can offer free delivery if the restaurant pays off immediately. Estimated electricity consumption of the freezer is $200 in 5 years. The supplier ascertains that the freezer is very durable, buyer doesn't need to care about maintenance costs.
However, if the restaurant needs better protection from breakdowns, the warranty is free for the first 12 months after the purchase. This warranty package can be extended once for another 24-month period with the cost of $75. After 5 years, the buyer will be able to resell this freezer for $250. What would be the estimated total cost of ownership of this freezer if the restaurant owner buys the extended warranty package?

Extra units that are held in inventory to reduce the risks of stock-out are called...?

An organisation may incur additional costs in stockout events. Which of the following is an exam-ple of costs of inventory stockouts?