FEFO (first expired, first out)
First Expired, First Out (FEFO)
In one sentenceA rule for issuing inventory in which the item closest to expiry goes out first, not the earliest received. It suits medicines, food and anything with an expiry date.
Simply put
A new batch may arrive with an earlier expiry than an old one. With FEFO you issue the one closest to expiry whatever its arrival date, so fewer goods expire.
This is a rule for moving goods in the warehouse, not a method for costing inventory in the books.
Example
A medicine warehouse has a batch that arrived in January and expires in December, and a batch that arrived in March and expires in September. Under FEFO the March batch is issued first because it expires before the other.
Don't confuse it with
First in, first outFIFO is a costing method that assumes the earliest received is sold first, while FEFO is an issuing rule based on the nearest expiry.
in FullScreen ERP
The system alerts you to items close to expiry. Warehouses and items