What does "first in = first out" mean in the context of stock management?

The principle of "first in = first out" (FIFO) means that older stock is used before newer stock. This method is particularly important in inventory management to ensure that products are used in the order they are received, minimizing waste and ensuring quality. In contexts like food service, using older items first helps prevent spoilage and maintains freshness, as older stock has a higher likelihood of nearing its expiration date compared to newly received products. By following this rule, businesses can maintain consistent quality and optimize their inventory rotation practices. The other options do not accurately reflect this established stock management practice, as they suggest using new stock before old stock or employing random usage methods, which undermine the basic principles of FIFO.