Why is FIFO important in managing stock?

FIFO, or First In, First Out, is an essential concept in inventory management, particularly for perishable goods. This method ensures that the oldest stock is sold first, which helps to prevent products from expiring and reduces waste. By regularly rotating stock, businesses can maintain product quality and adhere to health and safety regulations, especially in the food industry where expired goods can pose significant risks to customers.

This practice not only helps in maintaining customer satisfaction but also protects the business from financial losses that can arise from having to discard expired products. While minimizing costs, increasing sales volume, and simplifying inventory tracking are important in their own right, the primary focus of FIFO is to ensure that stock is rotated properly, thus maintaining the quality and safety of the products offered.