INVENTORY & WAREHOUSE OPERATIONS
First in,
first out (FIFO)
FIFO, first in first out, is a stock-rotation approach that prioritizes eligible inventory using the oldest defined receipt or aging date.
FIFO (FIRST IN, FIRST OUT) IN PRACTICE
- Define the aging date
- Keep stock identities
- Pick oldest eligible stock
A WORKED EXAMPLE
Monday received before Thursday.
Lot A arrives Monday and Lot B Thursday. Under receipt-date FIFO, A is selected first when both are eligible for the order. If B expires earlier, an expiry-based FEFO rule could give a different result. Name the date and selection rule rather than simply asking for old stock first.
WHAT THIS MEANS FOR YOUR QUOTE
Make the requirement explicit
Use the same scope and units when comparing providers. Put the agreed responsibility, included work and exception process into the service description.
A LITTLE MORE CONTEXT
Questions about FIFO (First In, First Out)
Does FIFO always ship the earliest-expiring lot?
No. Receipt order and expiration order can differ.
Does warehouse FIFO establish accounting valuation?
No. The business’s accounting method and physical selection procedure must be established separately.
Source & example notes
Microsoft Learn: FIFO inventory picking aging. Further reading on the related controls and terminology. Product documentation describes a particular implementation; it does not establish a universal procedure or service commitment.
Definitions and worked examples are prepared by 3PL Hub. Numbers are illustrative, not provider rates, operating targets or guarantees.
Last updated: · 3PL Hub
