What is FIFO withdrawal method in SAP MM - Materials Management?

SAP Term: FIFO withdrawal method

• Component: MM

• Component Name: Materials Management

• Description: Abbreviation for "first in, first out". A method of issuing or withdrawing goods from stock in which the goods acquired earliest are used or sold first first in, first out. Closing stock in accordance with the physical inventory thus always comprises the most recent acquisitions and is thus also to be valuated at the prices thereof.

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• Key Concepts: 
  The FIFO (First In, First Out) withdrawal method is a stock management technique used in SAP Materials Management (MM). It is based on the principle that the oldest stock should be used first. This method is used to ensure that the oldest stock is used before newer stock, and that the stock rotation is done in a timely manner. 
  
  How to use it: 
  In SAP MM, the FIFO withdrawal method is used to determine which stock should be used first when goods are issued. The system will look at the date of entry for each item in the inventory and will select the oldest item first. This ensures that the oldest items are used before newer items, and that the stock rotation is done in a timely manner. 
  
  Tips & Tricks: 
  When using the FIFO withdrawal method, it is important to ensure that all items in the inventory are correctly labeled with their date of entry. This will ensure that the system can accurately select the oldest item first. Additionally, it is important to regularly check and update inventory levels to ensure that stock rotation is done in a timely manner. 
  
  Related Information: 
  The FIFO withdrawal method is just one of many stock management techniques available in SAP MM. Other techniques include LIFO (Last In, First Out) and Average Cost methods. Additionally, there are various reports available in SAP MM which can be used to monitor inventory levels and stock rotation.