What is Output Prioritization?
Output prioritization is an output systematic that is decided on a product basis, taking into account constraints such as the product's content, lifespan, and storage system.
The 3 Types of Output Prioritization are detailed below.
FIFO - First In First Out
In this system, which is the most general type of use, the oldest products are sold first. Thus, the risk of deterioration and loss of value is reduced. These products generally need to be stocked regularly.
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LIFO - Last In First Out
It is a system that is mostly used in products that do not pose a risk of deterioration or loss of value, such as aggregate, filling material or concrete blocks, due to the nature of the business. Since these types of products are generally stocked on top of each other, FIFO application is almost impossible.
FEFO - First Expired First Out
It is an inventory management system used especially in areas where the lifespan of products is of primary importance, such as the food, cosmetics, pharmaceutical and chemical industries. In addition to the stocking order for these types of products, stocking conditions such as temperature and humidity are also of great importance.
Output Prioritization Systems Comparison: FIFO vs LIFO vs FEFO
In addition, an accounting recording system must be created for each exit prioritization (FIFI, LIFO, FEFO). For this reason, it is necessary to be precise in order to enter the records according to this order.