Which of the following should be considered when an organisation plans for disposing obsolescent and redundant stock? Select TWO that apply.

Which of the following should be considered when an organisation plans for disposing obsolescent and redundant stock? Select TWO that apply.
A . Financial costs
B . Economic order quantity
C . ABC analysis
D . Takt time
E . Environmental issues

View Answer

Answer: A, E

Explanation:

If the planning and mitigation measures fail and redundant or obsolete stock is identified, it needs to be removed from the current inventory location as quickly as possible. There are some methods to deal with these types of stock. The worst case scenario is disposal to landfill, which is inadvisable if it can be avoided, both from environment point of view and the financial costs of such disposal.

For example, the problem of obsolete pesticides remains extremely serious and urgent. Many of the stocks identified continue to deteriorate thereby giving rise to an ever escalating source of severe pollution and posing a threat to human health, the environment and development in particular. To reduce the impact of obsolete pesticides on environment, FAO initiated a project in Yemen in which a total of 262 tonnes of obsolete pesticides were removed from 20 different sites and successfully disposed of between March and June 1996. The major field operation was completed in six weeks during which period almost all obsolete pesticides were brought to a central location and subsequently shipped to the United Kingdom for incineration.

Reference: CIPS study guide page 89

LO 2, AC 2.1