Question

Dawson opened his own grocery store. He has observed that despite good sales of canned foods, many cans kept at the back of the shelf often ended up past their expiry date and needed to be thrown in the trash. He instituted a system of food

the first in, first out (FIFO) rule in his store to ensure that food cans near their expiry date are sold before reaching that date.

Answer 1

The new rule that Dawson has initiated in his store is a FIFO METHOD OF FOOD FLOW OR FOOD DISTRIBUTION.

There are two principal inventory methods that can be used to account for the flow of goods in a business organization, these are LIFO [ Last In First Out] method and FIFO [First In First Out] method. The LIFO method involves selling the newest stocks first before selling the old stocks while the FIFO method involves selling the old stocks first before selling the new stocks.

The FIFO method is a more reliable method of selling stocks because it allows for goods to be sold before their expiry date is reached. Since expired goods can not be sold, the FIFO method saves the company from incurring unnecessary costs that arise from expired goods.

Step-by-step explanation: