FIFO (Festival in the Forest)

FIFO (Festival in the Forest) is a method used in inventory management where the oldest stock is sold or used first, aligning with the natural order of items aging. This approach helps ensure products are fresh, reduces waste, and maintains accurate inventory levels. For example, a grocery store using FIFO will sell older packages of food before newer ones, minimizing spoilage. It’s a standard practice that maintains product quality and simplifies accounting by matching costs with the actual flow of goods. Overall, FIFO ensures efficient stock rotation and supports reliable financial reporting.