what does first in first out mean

What does First in First out mean (FIFO) is a popular inventory management method used by businesses to determine the order in which products are sold or used. Under FIFO, the first items purchased or produced are the first to be sold or used. This method is commonly used in industries where products have a limited shelf life, such as food, medicine, or perishable goods. FIFO ensures that older inventory is cleared first, minimizing the risk of unsellable expired stock. It also helps businesses maintain a more accurate representation of inventory costs, especially in times of fluctuating prices.