Which inventory management method uses the oldest supplies first while considering expiration dates?

The method that employs the principle of using the oldest supplies first, particularly taking into account expiration dates, is known as First In, First Out (FIFO). This approach ensures that items that were acquired first are sold or used before newer inventory. This is especially crucial in industries where products have a limited shelf life, such as in food or pharmaceuticals, as it helps to minimize waste and ensures that consumers receive the freshest products possible.

In implementing FIFO, organizations prioritize the use of older stock to maintain quality and compliance with safety standards, ultimately supporting effective inventory turnover. This strategy can lead to better accuracy in inventory valuation as it generally reflects current market conditions more accurately, particularly when prices fluctuate.

The other methods mentioned do not prioritize the use of older supplies or take expiration into account in the same way. Just In Time (JIT) focuses on minimizing inventory levels to reduce costs and improve efficiency. Last In, First Out (LIFO) operates under the opposite principle of using the most recently acquired inventory first, which can lead to older items remaining unused. The Weighted Average Cost method averages the cost of inventory over time but does not specifically address the timing of usage based on dates of acquisition. Therefore, FIFO distinctly aligns with the practice of using the oldest supplies first