What does FIFO stand for in inventory management?

FIFO stands for "First in, First out," which is a method used in inventory management to ensure that the oldest stock is sold or used before newer stock. This approach is especially important in the produce industry, where products have a limited shelf life. By implementing FIFO, perishables that were added to inventory first are the first to be sold, thereby reducing the risk of spoilage and waste.

Using this method helps maintain the quality of products offered to customers, as it ensures they are receiving fresher items. It also assists in accurate inventory tracking, as it simplifies the management of stock rotation. This practice is widely adopted in various industries but is particularly crucial in produce management due to the nature of fresh goods.

The other choices describe concepts that do not align with standard inventory practices, which is why they are less appropriate in this context.