This measure calculates the percentage of total inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. It is part of a set of Process Efficiency measures that help companies optimize the performance of their "produce/manufacture/deliver product" process by minimizing waste and refining resource consumption.
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Value of inventory obsolescence as a percentage of total inventory value
Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.