What is first in first out in SAP IS-AFS-SD - Sales and Distribution?

SAP Term: first in first out

• Component: IS-AFS-SD

• Component Name: Sales and Distribution

• Description: Principle of the distribution of existing stocks that you can use in the multi-store order II in the case of a stock shortage. Stores you have given high priority to are always assigned the entire purchase order quantity of material during a distribution according to the FIFO principle. If a sort sequence is not explicitly entered, the stock distribution proceeds alphabetically or numerically according to customer number.

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• Key Concepts: 
  First in first out (FIFO) is an inventory management system used in SAP IS-AFS-SD Sales and Distribution. It is a method of inventory control that ensures that the oldest items in stock are sold first. This helps to ensure that the most up-to-date items are available for sale and that the inventory is not overstocked with outdated items.
  
  How to use it: 
  In SAP IS-AFS-SD Sales and Distribution, FIFO can be used to manage inventory. To do this, the user must first set up a FIFO rule in the system. This rule will determine which items are sold first based on their age. Once the rule is set up, the system will automatically select the oldest items in stock when an order is placed. 
  
  Tips & Tricks: 
  When setting up a FIFO rule in SAP IS-AFS-SD Sales and Distribution, it is important to consider the age of the items in stock. If there are multiple items of different ages, it may be beneficial to set up a rule that prioritizes the oldest items first. This will help ensure that the most up-to-date items are available for sale. 
  
  Related Information: 
  FIFO is just one of many inventory management systems available in SAP IS-AFS-SD Sales and Distribution. Other methods include Last In First Out (LIFO) and Average Costing (AVCO). Each method has its own advantages and disadvantages, so it is important to consider which one best suits your business needs before implementing it.