In a new Feature of the Day, Pam Misialek explains that all inventory item types can now be Inactive Items with the upcoming release of GP 2013.
Feature of the Day: Inactive Items – Inside Microsoft Dynamics GP
Sales, Purchasing & InventoryTips & Hidden FeaturesGP 2013
Archived post from 2012. Dynamics GP and the links it points to have changed since; check current documentation before relying on version-specific steps.