Stock rotation

Stock rotation is a practice in the inventory management system where older stock (or stock with a closer expiration date) is used before newer stock. This practice is used in a wide range of industries such as retail, pharmaceutical, and food service industries to manage inventory and reduce waste.

Etymology

The term "stock rotation" comes from the practice of physically rotating items in a store or warehouse to ensure that older stock is used first. The term is now used more broadly to refer to any system that ensures older stock is sold before newer stock.

Process

Stock rotation involves organizing items so that the oldest stock is sold first. This is often done by placing older items in front of newer ones, or by moving older stock to a "sell first" area. In some cases, stock rotation may involve physically rotating items, such as in the case of certain types of produce that need to be regularly turned.

In industries where products have a limited shelf life, such as the food service or pharmaceutical industries, stock rotation is especially important. If older stock is not sold before it expires, it must be discarded, leading to waste and lost revenue.

Related Terms

• First-In, First-Out (FIFO): This is an important principle of stock rotation. It means that the first items that are added to a stock should be the first ones to be sold.
• Just In Time (JIT): This is an inventory management system that aims to minimize stock levels by only ordering and receiving goods as they are needed.
• Last-In, First-Out (LIFO): This is the opposite of FIFO, where the last items added to the stock are the first ones to be sold. This method is not commonly used in industries where products have a limited shelf life.

See Also

• Inventory Management
• Supply Chain Management
• Warehouse Management System

Stock rotation Resources
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