What is the FIFO method (First In, First Out) and why is it important?

The FIFO method (“First In, First Out”) is a stock management rule that ensures the oldest items in inventory are used or sold first. In other words, the first product that enters is the first to leave.

This approach is especially important for perishable goods or items prone to obsolescence, as it prevents products from staying in storage too long and deteriorating. By applying FIFO, companies maintain healthy inventory rotation, reduce waste, and minimize value loss.

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