HIFO (Highest In First Out)

HIFO is an acronym of the words Highest In, First Out. In practice, just the acronym HIFO is used. This is a simple, highly versatile management method, or way of organizing, handling and prioritization of moving of primarily material or other commodities. Requirements / material are serviced in order, from the most expensive items regardless of date of entry or acquisition. The term HIFO is most often used in logistics and transportation, warehouse management, production logistics or accounting.

Use of the HIFO in practice:

• Logistics and transportation: the most expensive material is shipped as the first one
• HIFO as a method to reduce the taxable income for the period
• HIFO as a method for the rapid increase in sales