What is FIFO inventory management?

What is FIFO inventory management?

FIFO stands for 'First In, First Out.' It's an inventory management method where the oldest stock is sold first.

Why is FIFO important for businesses?

FIFO helps businesses reduce waste, especially for perishable goods, and ensures that inventory is rotated effectively.

Can you give me an example of how FIFO works?

Sure! If a grocery store receives a shipment of milk, it will sell the older milk first to prevent spoilage.

What are the advantages and disadvantages of using FIFO?

Advantages include reduced spoilage and better cash flow. Disadvantages can be higher costs if prices rise after purchase.