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In order to track stock using the FIFO method, businesses must maintain detailed records of each item’s entry and exit date.

In this way, FIFO ensures that the oldest items are always sold or used before newer items in order to avoid any potential losses from expiration or price changes. When using the FIFO system, new items are added to the back of the inventory, while the oldest items are taken from the front of the inventory to be sold or used first. There are also other benefits of using FIFO which we’ll discuss in this article. By ensuring that the older inventory is sold first, FIFO helps to avoid having too many products sitting in inventory that could eventually become obsolete or decrease in value. However, FIFO can be used in any industry where product demand or prices may fluctuate. Same principles can be applied for first expired, first out, using expiration date instead of receipt date. This system is often used in industries where products have expiration dates, such as in the food and beverage industry, to ensure that the oldest products are used or sold before they reach their expiration. Introduction to FIFOįIFO is an inventory management method that follows the principle of “first in, first out.” As mentioned, this means that the oldest products in a warehouse are the first to be sold or used. Let’s take a closer look at how FIFO works and how you can use it in your own business. This system assumes that the oldest items in stock are the first ones to be sold. One popular inventory management system is First In, First Out (FIFO). Therefore it is crucial to manage it in a way that minimizes waste and maximizes profits. Inventory is often one of the largest assets a business has.