fbpx

Speed Commerce

What Is First-In, First-Out (FIFO)?

3PL Glossary > First-In, First-Out (FIFO)

First-In, First-Out (FIFO) Definition | TLDR

First-In, First-Out (FIFO) is a method of inventory valuation and management where the oldest inventory items are sold or used first, ensuring that goods are consumed or sold in the order they were received or produced.

First-In, First-Out (FIFO) Meaning

First-In, First-Out (FIFO) is a method of organizing and manipulating data structures, commonly used in computing and accounting. In the context of data structures, FIFO refers to a queue, a collection of elements where the first element added is the first one to be removed. It operates on the principle that the first item to enter the queue is the first one to be processed, much like a traditional queue in real-world scenarios such as waiting in line. This ordering ensures that items are processed in the same sequence in which they were added, maintaining a chronological order.

What Is the Difference Between FIFO and LIFO?

Looking for a better fulfillment solution?​

A fulfillment expert will get back to you within 1-2 business days.

What We Do

Our Solutions

Speed Commerce is a leader in eCommerce services for retailers and manufacturers. We provide outsourced services for our clients. To learn more, watch this short video. 

First-In, First-Out (FIFO) is a method of organizing and manipulating data structures, commonly used in computing and accounting. In the context of data structures, FIFO refers to a queue, a collection of elements where the first element added is the first one to be removed. It operates on the principle that the first item to enter the queue is the first one to be processed, much like a traditional queue in real-world scenarios such as waiting in line. This ordering ensures that items are processed in the same sequence in which they were added, maintaining a chronological order.

FIFO is a straightforward and intuitive concept that finds applications in various domains. Whether managing data structures in computer science or determining the cost flow of inventory in accounting, the FIFO principle provides a systematic way to handle and process items in the order in which they are received or acquired. Its simplicity and consistency make it a widely adopted method in different fields, contributing to efficient and organized operations.

FAQs

Not necessarily. While FIFO tends to result in lower taxes during periods of rising prices due to its impact on reported net income, the overall tax implications depend on various factors, including the specific tax regulations and the company's financial situation.

Yes. FIFO is a generic principle that can be applied to any type of product or inventory system. Whether dealing with perishable goods, non-perishable items, or specific industries, the FIFO method maintains the order of item processing based on their entry sequence.

Not always. While FIFO often leads to higher reported net income during periods of rising prices, the impact on net income depends on factors such as the specific costs associated with the goods sold and the overall trend in inventory costs. In certain scenarios, LIFO may result in higher reported net income.

Looking for a better fulfillment solution?

REQUEST A QUOTE

Once your request is submitted, a fulfillment expert will get back to you within 1-2 business days.

Let's Get Started

A fulfillment expert will get back to you within 1-2 business days.