Material flow and inventory management methods (FIFO, LIFO and FEFO)

FIFO method

FIFO stands for First In First Out and refers to a strategy in which goods are always removed from storage starting with the oldest (= first placed in stock). This method is often used by warehouses with fresh food or other perishable goods, as they need to constantly rotate their inventory and get rid of the oldest ones.

LIFO method

LIFO is an abbreviation for Last In First Out and the exact opposite of FIFO – in this strategy , the newest goods are removed first (= the last goods that were put into storage). This strategy is particularly suitable for bulky and heavy goods or loose materials. If you have firewood in stock, for example, it would be inefficient to take the oldest wood from the bottom each time you remove it and then rearrange the entire block.

However, with the LIFO method, the oldest material ages, so it is advisable to adjust the warehouse so that you use older stocks at least once in a while.

FEFO method

FEFO stands for First Expired First Out and refers to a strategy in which goods are removed from storage according to their expiration date . The warehouse worker always takes the goods that are closest to expiration, regardless of the date of storage or warehouse position. The FEFO method is particularly suitable in food or pharmaceutical warehouses, where ignoring expiration dates would lead to large economic losses.

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