Monday 17 December 2018

FIFO (First in First Out)


Method of flow/flow from inventory showed how an item is taken from the inventory. The flow of inventory in accounting may not be the same as the actual state of affairs in the flow of finished goods. With FIFO, inventory costs accounted for in the goods ready for sale or assumed that already there is more long and it means that stock is available purchase the longest or most used to be produced and units that are used will be charged at the price of the goods for the longest.

FIFO (First in First Out) is the principle whereby goods that first came out, it had to come out than the stuff that comes later. This principle needs to be applied in order for the goods stored in the warehouse is always newer stuff.


This is to avoid the occurrence of date goods for goods which have a time period of use, items appear to be clean because for storage in a warehouse can be exposed to dust, packaging the goods are not damaged and always new, items spared from damage. Many of the benefits obtained in these FIFO principle applied. Officer warehouse will also have understood this principle.

Same is the case with a display of goods in supermarkets. The officer put new stuff on supermarket shelves the backside, so as not to be taken by the customer comes first. Earlier items are placed in the upper part of the stuff that came later.

This Setup then the way customers are expected to have even greater opportunities to take stuff that is on top of the heap or earned the front shelf placement. In realizing this principle, there is a price to be paid. Where the employees have to unload goods that exist in what the placement of items and stuffed stuff comes later, and return the item on the Setup on site placements. Indeed, need to realize that to be able to achieve better things then it takes effort to make it happen.

FIFO Principle

Warehouse clerk of course know about this FIFO principle. However, many items are place in the warehouse not applying the FIFO principle. Require resolute attitude in applying a principle that bring many benefits. Not only for companies but also for customers as it gets the goods in good condition. The determination of the area of responsibility is require. To be able to do the measurement of the progress of the repair and the commitment of the employees of the warehouse in applying the FIFO principle.

The Setup from the side then, Manager of the warehouse need to specify how the arrangement of goods on the shelves for easy placement or location for warehouse clerk sets the FIFO manner. By setting up the Setup models FIFO then the officers get the ease of placing the goods in the FIFO.

Supervisor warehouse is also easy to check and measure the working principles of FIFO have been run. Working principles of FIFO is working at a depth of. Therefore, how the number of items that will be need to be provide. The provision of places is calculate base upon. The number of bookings or customs goods come to these items and goods moving out. In this way then the officer shed be facilitate to provide goods placement.


  1. Perpetual

In this way any exit or entry of goods can be know with certainty and detail. As always note any kind of stuff out or in, as well as the cost of materials incur. In this way we can facilitate in conducting casting against coming out the influx of goods.

  1. Periodic

By means of periodic inventory items can be find in a certain period. But with the way this came out of the entry of the goods cannot be known with detail. Because in the recording of only the entry of the goods are record. To find out how material cost.

Periodic use in production must be complete by calculating the remaining supplies of the raw materials. There are still casting at the end of the accounting period.

Cost of goods plus the initial cost of goods supplies raw materials purchase minus. The cost of goods inventories raw materials are still there at the end of the period are the costs of the raw materials use.

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