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For that nature of activities , FEFO not FIFO is preferred because FEFO is first expire is first out while FIFO is first in first out. And of course at pharmaceutical , we preferred first expire to be out which more accurate than first in first out. Because you may found next order you purchased from market found more fresh than the first one
fifo - Is most appropriate to the sensitivity of the items in the shelf life
stands for first-in first-out, meaning that the oldest inventory items are recorded as sold first but do notnecessarily mean that the exact oldest physical object has been tracked and sold. In other words, the cost associated with the inventory that was purchased first is the cost expensed first. With FIFO, the cost of inventory reported on the balance sheet represents the cost of the inventory most recently purchased.
Most appropriate method would be FIFO Pharmaceutical is one of the most sensitive industry that deals with life so Quality, security, identity are the most important factors to maintain making inventory management of the industry is a difficult job.
A pharmaceutical company handles more than 600 types of products that includes raw materials movement, packaging and secondary packaging of the finished products. Planning and scheduling in the pharmaceutical companies is a critical activity.
Though I am not experienced with Pharma industry but to my understanding a mix of inventory control and recording method should prevail in pharma depending upon the nature of material.
Simple it will be FIFO; due to expiries. LIFO is for very limited number of industries.
It should be FIFO as pharmaceutical products have expiratiion.
In the pharma industry, Drugs and medicines are subject to expiration and hence it is expected that these companies will use the FIFO inventory method.
In case of companies engaged in distributing medical devices, medical equipment, and other pharmaceutical products, wherein the products are subject to obsolescence , it is expected that the companies will use the LIFO inventory method.
