What's ABC and FIFO in warehouse

Question

Accepted Answer

ABC and FIFO are inventory management techniques used in warehouses.

ABC stands for Activity Based Costing and is used to categorize inventory items based on their value and importance.
FIFO stands for First In, First Out and is a method of organizing and retrieving inventory items based on their arrival time.
ABC analysis helps prioritize inventory management efforts by focusing on high-value items, while FIFO ensures that older items are used or sold first to prevent spoilage or obsolescence.
ABC classification can be done based on criteria like sales volume, profitability, or criticality, while FIFO ensures proper stock rotation and reduces the risk of holding obsolete inventory.
For example, in a warehouse, high-value items like electronics or luxury goods may be categorized as 'A' items in ABC analysis and given more attention in terms of storage, handling, and replenishment.
In FIFO, perishable goods like food or pharmaceuticals are stored and retrieved based on their arrival time to prevent spoilage and ensure freshness.

Accepted Answer

ABC For PRIORITY and first in first out

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