Which of the following would be the best policy to follow stock rotation/ controlling ?

Implementing a first-in, first-out (FIFO) policy would be the best approach to follow for stock rotation and controlling. This means that the oldest stock is used or sold first, ensuring that products do not expire or become obsolete before they are used. FIFO helps prevent waste and ensures that inventory is managed efficiently.

- First In, First Out (FIFO): Assuming that older inventory is used first, this strategy is straightforward and easy to implement. FIFO ensures that the cost of goods sold is based on the oldest inventory costs, potentially reducing the company's tax liability.


- Last In, First Out (LIFO): This method assumes that the most recently acquired inventory is sold first. LIFO can be beneficial during periods of rising prices, as the cost of goods sold will be based on the most recent (and higher) costs. However, it can lead to the overstatement of inventory value in times of falling prices.


- Weighted Average Cost (WAC): This method assigns an average cost to all inventory items, regardless of when they were acquired. WAC is a simple and widely used method that smooths out fluctuations in inventory costs.


- Specific Identification: This method involves tracking the cost of each individual inventory item and assigning that cost to the specific item when it is sold. Specific identification is the most accurate method, but it can be time-consuming and complex to implement.