What does the acronym FIFO stand for in inventory management?

The acronym FIFO stands for "First In, First Out" in inventory management, which is a crucial method used primarily in food service and retail industries. This approach ensures that the oldest inventory items—those that were received first—are sold or used first. This is particularly important in managing perishable goods, where maintaining freshness and quality is critical.

Using FIFO helps reduce waste by minimizing the likelihood that older food products will expire before they can be consumed. When implemented correctly, this system also enhances customer satisfaction by ensuring that they receive the freshest products available. This method is not only about managing stock but also aligns with best practices in food safety and handling, which are essential for maintaining hygiene standards in food service operations.

Understanding and applying the FIFO method is fundamental for anyone involved in food service management, as it helps streamline operations and can significantly impact the bottom line by reducing spoilage and waste.