How does FIFO help inventory management?

• A. It schedules deliveries based on supplier preference.
• B. It minimizes storage space by stacking items tightly.
• C. It ensures oldest stock is issued first to prevent expiration or obsolescence.
• D. It prioritizes high-value items for reassignment.

Answer: (C)

FIFO is the practice of issuing the oldest stock first. In inventory management, this targets items that have a limited shelf life or can become obsolete. By rotating stock so the earliest received lots—those with the oldest dates or earliest expiration—are used before newer ones, you reduce waste from expired or outdated items and keep on-hand supplies usable for operation needs. In practice, stock is tracked by lot numbers and expiration dates, and storage is arranged so older items are the first to be pulled. This approach also helps keep inventory records aligned with real risk of loss and supports compliance with safety and regulatory requirements. It isn’t about how deliveries are scheduled, nor about packing density, nor about prioritizing high-value items for reassignment.