What is FIFO principle in SAP LO-BM - Batch Management?

SAP Term: FIFO principle

• Component: LO-BM

• Component Name: Batch Management

• Description: Batches The sort criterion for the arrangement of batches in the batch selection list. If the batch selection list is sorted according to the FIFO first in, first out principle, the system suggests the batches that have been in the warehouse or stores for the longest period of time for a goods movement.

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• Key Concepts: 
  The FIFO (First In, First Out) principle is a method of inventory management used in SAP's LO-BM Batch Management component. It is based on the idea that the first items to enter a warehouse should be the first items to leave. This ensures that the oldest items are used first, and that the newest items are kept in reserve. 
  
  How to use it: 
  The FIFO principle can be used in SAP's LO-BM Batch Management component to manage inventory. When a batch of goods is received, it is assigned a unique batch number. This batch number is then used to track the goods as they move through the warehouse. When an item is requested, the system will look for the oldest batch with available stock and fulfill the request from that batch. 
  
  Tips & Tricks: 
  When using the FIFO principle, it is important to ensure that all batches are properly labeled and tracked. This will ensure that the oldest batches are used first and that no batches are overlooked or forgotten. Additionally, it is important to regularly review inventory levels and adjust stocking levels accordingly. 
  
  Related Information: 
  The FIFO principle is just one of many inventory management methods available in SAP's LO-BM Batch Management component. Other methods include LIFO (Last In, First Out), FEFO (First Expired, First Out), and ABC Analysis (Always Better Control). Each method has its own advantages and disadvantages, so it is important to choose the right one for your business needs.