FEFO vs FIFO in Pharmacy Inventory: How Expiry Order Protects Working Capital
In general warehousing, First-In, First-Out (FIFO) assumes that the earliest received merchandise should be sold first. However, in pharmaceuticals, supplier delivery dates do not always correlate with remaining shelf life. A distributor might deliver Batch B with a 12-month expiry today, while Batch A received last month has an 18-month shelf life.
First-Expiry, First-Out (FEFO) ensures that medicines with the nearest expiration dates are allocated and dispensed first, regardless of when they entered the stockroom. Applying FEFO prevents expired stock from sitting at the back of shelves and directly reduces expiry write-offs.