Batch (lot) tracking
In one sentenceRecording the batch number for every quantity entering inventory with its production and expiry dates, to know the source of each unit and track it until sale.
Simply put
Every batch from the factory has a batch number. When you record it on receipt and sale, you know where each batch went.
You need it most when a faulty batch is recalled from the market: you know exactly how much of it you have and who bought it, instead of recalling the whole item.
Example
A food factory announced the recall of one batch of a product because of a packaging fault. The store that records batches knew immediately that it had 40 boxes of it in two branches, withdrew them and kept the other batches on sale.
Don't confuse it with
FEFO (first expired, first out)The batch is information recorded for each lot, while FEFO is a rule that uses this information when issuing.