Excess and Obsolete (E&O) inventory can be defined as inventory that is no longer used or required, resulting in costs to store or dispose the items. This type of inventory can occur due to changing customer demand, technology advances, changing market conditions, forecasting errors, miscalculations of sales trends, excess production, non-turning inventory, and other related causes. Proper management of E&O inventory can help companies reduce costs, thus improving profitability and overall efficiency.