An inventory management technique where the last items added to inventory are the first ones to be removed for picking and shipping. This method prioritizes the most recently received stock, ensuring older inventory remains in storage longer.
LIFO proves particularly valuable for warehouses handling non-perishable goods where product expiration isn’t a concern, such as hardware, automotive parts, or seasonal items. It can simplify warehouse operations by eliminating the need to rotate stock or access deeper storage locations, as workers can pick from the most accessible, recently received inventory.
For example, in a tire warehouse, newly delivered tires placed at the front of storage racks would be picked first, while older inventory sits further back. However, LIFO requires careful consideration as it can lead to obsolete inventory if older stock never gets rotated out. Modern WMS solutions can track aging inventory to prevent this issue while maintaining LIFO picking efficiency.
