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 practice is particularly important in the produce and food industries, where perishable items have a limited shelf life. By following the FIFO method, businesses minimize waste and losses due to spoilage, as they ensure the items that were received first are the first to be sold.

Implementing FIFO helps maintain product quality and customer satisfaction, as consumers receive fresher goods. This method also aids in inventory accuracy and helps in easier tracking of expiration dates, making it a widely adopted approach in managing perishable inventory. In contrast to FIFO, other methods could either lead to outdated stock remaining on shelves or complicate the workflow, which can be detrimental in a fast-paced retail environment.