LIFO - FIFO
1 Nov 2007
When I was at university I did a riveting subject on inventory management for manufacturing companies. In it I learned that there are two of the many methods of managing your inventory are the following:
LIFO - Last In First Out
FIFO - First in First Out
If you utilised the LIFO principal in a manufacturing environment and your stock didn't move very fast and/or was perishable, you'd end up with old stock that you couldn't use and you'd have to throw away.
That's why supermarkets use a FIFO methodology where they pull the old stock to the front and pack the new stock in the back on the shelves.
Very busy supermarkets don't have to worry about this too much because the whole shelf empties frequently, but in quieter shops or for items which don't move very fast you'd have to pull the old stuff forward or else it wouldn't get sold.
Anyhow, sometimes I think about my yarn stash (which isn't really that big) like that. I still have the first yarns I bought when I started knitting. I am more likely to use the yarn I most recently bought first than go back and get rid of the old stuff. So, I'd say I utilise the FIFO inventory system when managing my yarn stash. And that isn't good inventory management, because my yarn stash isn't a fast moving inventory.
This bothers me a lot.
I feel similarly about my WIP's. I am more likely to finish the most recently snoozed projects than the older ones. This too is bad inventory management.
And this bothers me a lot too.
Sometimes, when the guilt of being a bad inventory manager engulfs me, I feel quite overwhelmed and guilty.
And sometimes, this guilty feeling leads me to pull an item out of the closet - FIFO style (GOOD inventory management) and GET IT OFF MY CONSCIENCE!!!
Viola - the Debbie Bliss Pure Silk in Fuschia candle flame wrap a-la-knitabulous.
Five skeins. Nice and wide, blocking to follow.
(Notice the signature unwoven end.)
I feel better now. And you may now sit an exam in Management Accounting II at University if you like.
LIFO - Last In First Out
FIFO - First in First Out
If you utilised the LIFO principal in a manufacturing environment and your stock didn't move very fast and/or was perishable, you'd end up with old stock that you couldn't use and you'd have to throw away.
That's why supermarkets use a FIFO methodology where they pull the old stock to the front and pack the new stock in the back on the shelves.
Very busy supermarkets don't have to worry about this too much because the whole shelf empties frequently, but in quieter shops or for items which don't move very fast you'd have to pull the old stuff forward or else it wouldn't get sold.
Anyhow, sometimes I think about my yarn stash (which isn't really that big) like that. I still have the first yarns I bought when I started knitting. I am more likely to use the yarn I most recently bought first than go back and get rid of the old stuff. So, I'd say I utilise the FIFO inventory system when managing my yarn stash. And that isn't good inventory management, because my yarn stash isn't a fast moving inventory.
This bothers me a lot.
I feel similarly about my WIP's. I am more likely to finish the most recently snoozed projects than the older ones. This too is bad inventory management.
And this bothers me a lot too.
Sometimes, when the guilt of being a bad inventory manager engulfs me, I feel quite overwhelmed and guilty.
And sometimes, this guilty feeling leads me to pull an item out of the closet - FIFO style (GOOD inventory management) and GET IT OFF MY CONSCIENCE!!!
Viola - the Debbie Bliss Pure Silk in Fuschia candle flame wrap a-la-knitabulous.
Five skeins. Nice and wide, blocking to follow.
(Notice the signature unwoven end.)
I feel better now. And you may now sit an exam in Management Accounting II at University if you like.
posted by knitabulous at Thursday, November 01, 2007 |
