A.5 Inventory Liability (Excess & Obsolete)

A.5 Inventory Liability (Excess & Obsolete)

• Context: In EMS, the biggest financial risk is buying parts for a customer who then cancels the order.
• The "Unique Parts" Clause: Customer accepts 100% liability for custom parts (PCBs, custom metal) immediately upon order.
• The E&O (Excess & Obsolete) Aging Policy:
  • 90 Days: Warning triggered for slow-moving stock.
  • 180 Days: Customer must pay carrying costs (warehousing fee).
  • 365 Days: Mandatory buy-back (Customer must ship parts to their facility or pay for scrapping).