HIFO (Highest In - First Out)
storage of goods according to the HIFO method
HIFO stands for Highest In - First Out . This term describes a strategy in warehousing. The purpose is to organize warehousing. The strategy determines how and at which storage locations items - goods, raw materials, products - should be sorted and in which order they must be removed for production.
Table of contents
definition
The HIFO method is a strategy used in warehousing and is characterized by certain features. More expensive goods are stored at the front so that they are available first for further steps in the work process.
characteristics
In the HIFO method, a company stores its products in such a way that the items with the highest value in a product group can be removed first.
The purchase price of the items is compared before sorting. The item with the highest price is then stored at the front. Time is not important in this process - in contrast to the LIFO principle .
Mission
Here is a brief overview of interesting facts regarding the use of the HIFO procedure:
- This method is used in companies that have purchased their raw materials at different prices .
- Companies can use the HIFO process to protect expensive goods from theft or other influences during storage because they always use them first.
- The use of this method also makes sense for speculative stocks , as particularly expensive items should be sold first.
- The use of the procedure only makes sense if no perishable goods are involved.
- HIFO processes are not suitable for all storage systems due to the frequent storage movements . The re-sorting and repackaging work requires storage systems with fixed storage locations .
