FEFO vs FIFO: Which Stock Rotation Method Is Best for Pharmacy?

FIFO (first-in, first-out) moves the oldest purchase out first. FEFO (first-expiry, first-out) moves the soonest-expiring batch out first. For packaged goods they are usually the same thing. For medicines, they are not — and the difference is written off in rupees.

Two Acronyms, One Decision

Your distributor rotates by purchase date; the law and your losses care about expiry date. A batch bought last month may expire before one bought in March. Any rotation policy that ignores expiry dates optimises for the wrong clock.

Why Expiry Beats Purchase Date

• Financial: expiring stock is 100% loss; old-but-valid stock is fine.
• Regulatory: supplying near-expiry or expired stock is a compliance failure, not just bad service.
• Operational: FEFO keeps return-to-supplier windows open — the batch that sells first is never the one quietly rotting.

Where FEFO Gets Complicated

• Scheme stock: free quantities complicate cost math but not rotation — rotate by expiry regardless of price.
• Customer-mandated batch: hospitals sometimes request specific batches; override is legitimate, but it must be recorded.
• Split strips: loose sales must decrement the FEFO batch fractionally — the earliest expiry applies at tablet level.

Enforcing FEFO at the Counter

Manual FEFO fails at 8 PM. The cashier will take the top strip. Automation fixes this permanently: the billing screen pre-selects the earliest-expiring batch with stock, shows the alternative if staff override, and logs the override reason. The compliant choice becomes the lazy choice.

Measuring Rotation Health

A Two-Batch Example

Batch B arrived later but expires ten months earlier. Under FIFO it waits on the shelf and may expire; under FEFO it sells first.

FAQ

• Does FEFO raise my purchase cost? No — it changes which batch sells, not what you paid.
• What if the earliest batch is damaged? Move it to adjustments first; FEFO should only choose sellable stock.
• Is FEFO expected in audits? Regulators expect non-expired, traceable supply; FEFO is the cleanest way to demonstrate it.

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