What is FIFO in SAP MM - Materials Management?

SAP Term: FIFO

• Component: MM

• Component Name: Materials Management

• Description: Abbreviation for "first in, first out". An approach to inventory management FIFO withdrawal method or valuation FIFO valuation procedure in which materials and products are actually or supposedly withdrawn from stock for sale or use in the order of their acquisition i.e. the first goods received are - or are deemed to be - the first to be issued.

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• Key Concepts: 
  FIFO stands for First In, First Out. It is a method of inventory management used in Materials Management (MM) in SAP. This method is based on the principle that the first items to enter the inventory are the first items to be used or sold. This means that the oldest items in the inventory are used or sold first, and the newest items are used or sold last. 
  
  How to use it: 
  In SAP MM, FIFO is used to manage inventory levels and ensure that the oldest items are used or sold first. This helps to prevent stock from becoming obsolete and ensures that inventory levels remain accurate. To use FIFO in SAP MM, you must set up a FIFO valuation method in the system. This will allow you to track and manage your inventory using FIFO principles. 
  
  Tips & Tricks: 
  When using FIFO in SAP MM, it is important to keep track of your inventory levels and ensure that they are accurate. This will help you avoid overstocking or understocking your inventory, which can lead to costly mistakes. Additionally, it is important to regularly review your FIFO valuation method to ensure that it is up-to-date and accurate. 
  
  Related Information: 
  For more information on FIFO and how to use it in SAP MM, please refer to the SAP Help Portal or contact your local SAP support team. Additionally, there are many online resources available that provide detailed information on how to use FIFO in SAP MM.