Final answer:
FIFO is the method of stock rotation where products are used in the order they are received to manage inventory effectively.
Explanation:
The term FIFO stands for First In, First Out, which is a method used for stock rotation where products are used in the order they are received. This ensures that products with the earliest arrival dates are used or sold first before newer ones.
For example, in a restaurant setting, FIFO would mean using the ingredients that were purchased first before utilizing newer stock to prevent spoilage and wastage.
Implementing FIFO can help businesses manage their inventory efficiently and reduce instances of obsolete stock.
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