Which stock should go first under FIFO and FEFO?

Instruction: Apply the supplied eligibility rule before selecting the 18 units for the order, then compare the two rotation methods.

Context:

A fictional order needs 18 EA. Eligible stock must be released and have an expiry date of October 25 or later. Each lot has 20 EA available. FIFO means first in, first out by receipt date; FEFO means first expired, first out by expiry date. This site applies either method only to eligible stock. Explain the selection under each method.

LotReceivedExpiryStatus
AOctober 1October 30Released
BOctober 3October 26Released
CSeptember 28October 24Released
DSeptember 27October 25Hold

All dates are in the same fictional year. No substitutions or hold releases are authorized.

Updated

Example answer

Only A and B qualify: C expires too soon and D is on hold. Under FIFO, I would pick 18 from A because it has the earlier receipt date. Under FEFO, I would pick 18 from B because it expires first among the eligible lots. Either pick leaves two units in the selected lot. I would follow the method on the actual task and record the selected lot and quantity. The oldest or closest carton is not automatically the right choice.

Worked solution

Eligibility precedes rotation. The eligible set is A and B, with 40 EA combined. FIFO sorts that set by receipt date: A, then B. FEFO sorts it by expiry: B, then A. The 18-EA requirement can be met entirely by the first eligible lot under either method.

C and D demonstrate different exclusions: a released lot can fail an order-specific shelf-life rule, while a lot with enough shelf life can still be unavailable because of its status. Neither rotation label overrides those checks.

Assessment criteria

  • Excludes C for expiry and D for hold status.
  • Selects A under FIFO and B under FEFO, with correct reasons.
  • Picks 18 EA and leaves two EA in the selected lot.

Stronger answer: Explains that the same physical inventory can produce different valid selections because receipt date and expiry date describe different properties.

Acceptable alternatives: The candidate may use a short eligibility list or explain the exclusions aloud. For the 25-unit FEFO follow-up, two separately recorded lot picks are valid.

Material mistakes: Selecting held D or too-short-life C, confusing receipt order with expiry order, or changing the rotation method to suit the nearest stock.

Follow-up question

What if the order grows to 25 EA and the task requires FEFO?

Use 20 EA from B and five EA from A, provided their status and availability remain unchanged. Record both lot quantities so the order remains traceable. A then has 15 EA remaining and B has zero; C and D remain ineligible for the same reasons.

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