Question

A form of shrinkage called​ ________ occurs when inventory cannot be used or sold at full​ value, owing to model​ changes, engineering​ modifications, or unexpectedly low demand.

Answer 1

A form of shrinkage called obsolescence occurs when inventory cannot be used or sold at full​ value, owing to model​ changes, engineering​ modifications, or unexpectedly low demand.

Explanation:

Any loss that occurs in an inventory or stock in a business that occurs due to the theft by employees, error in administration, fraudulent act of vendors, store damage, errors by cashiers, etc. The difference that occurs in the inventory that is recorded in the balance sheet of a company and the actual inventory is the shrinkage.

This will ultimately result in the money loss and must be carefully evaluated.  When an inventory cannot be sold for the value with which it was bought or cannot be used further by a business because of some less demand or cannot be changed for another usage then the type of shrinkage that arises will be known as an obsolescence.