Some classes of goods, particularly food products, are perishable. Merchants must move these items within a limited time period to maintain quality and minimize losses due to spoilage. The way to do this is to regularly rotate stock. AccountingCoach.com says the guiding principle of a good stock rotation system is fist-in, first-out. That is, the oldest stock is sold first. FIFO for stock rotation is a purely physical methodology and unrelated to whether a business's inventory accounting is based on FIFO or some other method.
FIFA Stock Rotation
Merchandisers usually keep goods in a storeroom awaiting placement on display shelves. Following a FIFO stock rotation policy means putting the oldest merchandise out on shelves first. Merchandise should be rotated every time displays shelves are restocked or a new shipment arrives and is placed in storerooms. In retail display areas, place the oldest items at the front on a shelf, with newer stock at the back. Customers usually pick up an item from the front and thus buy the older merchandise. Current inventory should be checked regularly and outdated items removed from shelves. Some products require particular attention. For example, potatoes and other produce have short shelf lives and typically need to be checked and rotated daily so that spoiled items are removed promptly.
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