Wouldn't it be a wonderful world if you were able to sell every single part that you purchased? The truth of the matter is that you are unable to achieve this utopia in the real world and therefore you have to make decisions about how long you keep hold of stock before you admit to yourself that it's just not going to sell.
Just think for a moment about the food that you buy. Accompanying the price of the produce there is usualluy a date that tells you when the food must be sold or it will be removed from the shelf and thrown away. This date is commonly known as the "Sell by date".
Example:
Although the parts that are occupying your shelves right now do not have a "sell by date" printed on them, you already know that there is a limited amount of time for them to sell because new vehicles are being launched and demand for older parts diminishes. Once this time has expired, those old parts are said to be past their sell by date, or in other words, they become obsolete stock.
Discussion:
There are no hard and fast rules for placing sell by dates on your parts stock, but the general rule seems to be around 2 years. After this amount of time, most parts have benefited from Stock Adjustments and are usually written off and thrown in the bin to make way for some fresh stock that will sell so that the profits can be recovered.