What does "stock rotation" refer to in inventory management?

Stock rotation in inventory management is a crucial practice that ensures that older inventory items are utilized before newer ones. This approach helps minimize waste, particularly for perishable goods or items that may have a limited shelf life, by decreasing the chance that older stock becomes obsolete or deteriorates before it can be sold or consumed.

By using older stock first, organizations can maintain freshness, maximize the value of their inventory, and enhance customer satisfaction by providing products that are less likely to be expired or outdated. This practice is fundamental in sectors where product lifespan is a key concern, including food service, pharmaceuticals, and other retail sectors where quality is critical.

The other choices focus on different aspects of inventory management but do not accurately describe the concept of stock rotation. For example, the idea of using newer stock first contradicts the essence of stock rotation, which prioritizes the older stock. Discarding old stock only does not encompass the proactive approach of actively using older items first, while regularly updating stock levels relates more to inventory tracking rather than the sequence of usage, which is the primary focus of stock rotation.