What is FIFO and why is it important to maintain?

Question

Accepted Answer

FIFO stands for First In, First Out. It is a method used in inventory management to ensure that the oldest stock is used first.

FIFO helps in reducing the risk of obsolescence by ensuring that older stock is used before newer stock.
It also helps in maintaining accurate inventory records and preventing stock from sitting on shelves for too long.
FIFO is required to be maintained to ensure that products are sold before they expire, especially in industries like food and pharmaceuticals.
It is a common practice in industries where products have a limited shelf life or where product quality deteriorates over time.
For example, in a grocery store, FIFO would ensure that the oldest perishable items are sold first to prevent wastage.

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