What does FIFO stand for in inventory management?

FIFO stands for First In, First Out. This method is crucial in inventory management, particularly in handling items that have a limited shelf life, such as medical supplies and sterile equipment. By using the FIFO approach, the oldest inventory items are used or sold before newer items. This practice helps prevent stock from expiring and ensures that items reaching their expiration dates are utilized first, thereby promoting efficiency and minimizing waste. Implementing FIFO ensures that the highest quality products are being used in patient care, which is essential in the Central Services department.

In contrast, the other options do not accurately reflect commonly recognized inventory management principles and do not prioritize the critical aspect of item expiration or usage order. Efficiency and proper inventory rotation are vital for maintaining standards in sterile processing environments, which is why FIFO is an integral part of industry practices.