What is the meaning of FIFO in inventory management?First In - First Order First In – First Out

FIFO in inventory management stands for "First In – First Out." This is a method used to manage inventory and ensure that the first items added to inventory are the first ones to be sold or used. This approach is particularly important in settings where products have a limited shelf life, such as food and pharmaceuticals, to prevent older stock from expiring before it is sold.

The FIFO method helps businesses maintain fresh inventory, ensures accurate financial reporting, and simplifies stock management. By adopting FIFO, companies can minimize waste, better manage their resources, and enhance customer satisfaction by providing them with the freshest products available.

In summary, FIFO is key for effective inventory control and operational efficiency in many industries.