Materials
First in First Out (FIFO) Method
An inventory valuation and management method where oldest stock is sold or used first.
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Updated 2025-10-01
Definition
FIFO ensures proper inventory rotation, reducing the risk of obsolescence or expiration by selling older items before newer stock.
Overview
Overview
FIFO is widely used in warehouses, retail, and manufacturing to manage perishable goods and maintain accounting consistency.
Benefits
- Reduces waste
- Accurate inventory valuation
- Compliance with accounting standards
Example
A grocery store sells the oldest batch of milk first, ensuring products are fresh for customers.
Tags
#FIFO#Inventory Management#Materials#Stock Rotation
Related Terms
LIFO (Last-In, First-Out)
Inventory Turnover
Dead Stock
