LOFO is an inventory management principle where the oldest or lowest-value stock is used or shipped first. This approach ensures that inventory is rotated efficiently, preventing obsolescence and spoilage while aligning with accounting or cost management strategies. LOFO is commonly applied in warehouse management and financial reporting for goods with variable costs or expiration considerations.Â
Characteristics:
- Issues oldest or lowest-value inventory first
- Prevents obsolescence or spoilage
- Supports cost management and accounting
- Facilitates efficient stock rotation
- Applies to warehouse and inventory management
