First In First Out (FIFO) is an inventory management method where the oldest stock items are sold or used first. This approach helps businesses maintain fresh products and reduces the risk of spoilage, especially in industries like food and pharmaceuticals. By ensuring that older items are prioritized, FIFO supports efficient inventory turnover. In a FIFO system, when new stock arrives, it is placed behind the existing stock. This way, employees are encouraged to use or sell the items that have been in inventory the longest. FIFO is commonly used in warehouses, grocery stores, and other retail environments to manage inventory effectively.