FIFO and LIFO differences

LIFO and FIFO are terms commonly used in inventory control, in cost accounting and in computer science. They all stand for literally the same phrases, but it means something different in each application.

In inventory control, they simply mean how you handle your merchandise. Do you restock the shelves by pushing the old items back to make room for new items of the same kind? Then the last items stocked will be the first items sold, or LIFO. This would be a typical stocking method for items that have no 'sell-by' date associated with them, or at least one that is in the distant future, such as canned good. Perishable items such as milk and eggs are restocked from the back, so that the old items are pushed to the front and are the first selected by shoppers; this is a FIFO restocking method. This is why most convenience stores have walk-in coolers behind their cold displays, so that they can stock from the rear.


Obviously, you can handle some merchandise LIFO and some FIFO, depending on what it is and how fast you have to move it.

In accounting, LIFO and FIFO mean two different ways of setting a value on your existing inventory and calculating your profit. Some retailers stock an individual type of item only once and then when it has sold out, they no longer carry it; ephemeral fads and fashions are examples of stock-once items. So they pay the same price for each unit of that particular item, and have no decision to make when valuing their inventory. Most retailers, however, stock a particular item for some time, replenishing their supply as they run low. The price on the item fluctuates with time, usually going up, alas. So the newest items you purchase may cost more (or less) than the ones you have had for awhile.

Of course you may adjust your selling price on the item, but what does the increase in unit cost do to the value of your existing inventory? If you had to replace it all, you would now have to pay the higher price (or rarely, get to pay the lower price). Is your inventory system sophisticated enough to be able to determine which purchase lot each unit in stock was a part of? If not, you have to select an inventory evaluation method, either FIFO or LIFO.

The choice between LIFO and FIFO can have a significant effect your P/L (Profit/Loss) statements. It is probably wise to pick a particular method and stick to it so there are not wild fluctuations in your numbers. Also note that some evaluation methods are not allowed for tax purposes. You should obviously not make a decision to use LIFO or FIFO cost accounting and inventory valuation without first consulting with an accountant and/or a tax attorney.

In computer science - LIFO and FIFO refer to how requests or intermediate results are stored and dealt with. If requests are handled on a first-come-first-served basis, the date store is called a 'queue'. If requests are handled Last-In-First-Out, the structure is called a 'stack'. Different operations require different data handling. The LIFO-FIFO terminology, originating in business and adopted by the computer industry, led to the addition of a third term for data storage; to wit: GIGO. Garbage in, garbage out.
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What is the Difference Between GSM and CDMA?

In cellular service there are two main competing network technologies: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). Cellular carriers including Sprint PCS, Cingular Wireless, Verizon and T-Mobile use one or the other. Understanding the difference between GSM and CDMA will allow you to choose a carrier that uses the preferable network technology for your needs.

The GSM Association is an international organization founded in 1987, dedicated to providing, developing, and overseeing the worldwide wireless standard of GSM. CDMA, a proprietary standard designed by Qualcomm in the United States, has been the dominant network standard for North America and parts of Asia. However, GSM networks continue to make inroads in the United States, as CDMA networks make progress in other parts of the world. There are camps on both sides that firmly believe either GSM or CDMA architecture is superior to the other. That said, to the non-invested consumer who simply wants bottom line information to make a choice, the following considerations may be helpful.


Coverage: The most important factor is getting service in the areas you will be using your phone. Upon viewing competitors' coverage maps you may discover that only GSM or CDMA carriers offer cellular service in your area. If so, there is no decision to be made, but most people will find that they do have a choice.

Data Transfer Speed: With the advent of cellular phones doing double and triple duty as streaming video devices, podcast receivers and email devices, speed is important to those who use the phone for more than making calls. CDMA has been traditionally faster than GSM, though both technologies continue to rapidly leapfrog along this path. Both boast "3G" standards, or 3rd generation technologies.

EVDO, also known as CDMA2000, is CDMA's answer to the need for speed with a downstream rate of about 2 megabits per second, though some reports suggest real world speeds are closer to 300-700 kilobits per second (kbps). This is comparable to basic DSL. As of fall 2005, EVDO is in the process of being deployed. It is not available everywhere and requires a phone that is CDMA2000 ready.

GSM's answer is EDGE (Enhanced Data Rates for GSM Evolution), which boasts data rates of up to 384 kbps with real world speeds reported closer to 70-140 kbps. With added technologies still in the works that include UMTS (Universal Mobile Telephone Standard) and HSDPA (High Speed Downlink Packet Access), speeds reportedly increase to about 275—380 kbps. This technology is also known as W-CDMA, but is incompatible with CDMA networks. An EDGE-ready phone is required.

In the case of EVDO, theoretical high traffic can degrade speed and performance, while the EDGE network is more susceptible to interference. Both require being within close range of a cell to get the best speeds, while performance decreases with distance.

Subscriber Identity Module (SIM) cards: In the United States only GSM phones use SIM cards. The removable SIM card allows phones to be instantly activated, interchanged, swapped out and upgraded, all without carrier intervention. The SIM itself is tied to the network, rather than the actual phone. Phones that are card-enabled can be used with any GSM carrier.

The CDMA equivalent, a R-UIM card, is only available in parts of Asia but remains on the horizon for the U.S. market. CDMA carriers in the U.S. require proprietary handsets that are linked to one carrier only and are not card-enabled. To upgrade a CDMA phone, the carrier must deactivate the old phone then activate the new one. The old phone becomes useless.

Roaming: For the most part, both networks have fairly concentrated coverage in major cities and along major highways. GSM carriers, however, have roaming contracts with other GSM carriers, allowing wider coverage of more rural areas, generally speaking, often without roaming charges to the customer. CDMA networks may not cover rural areas as well as GSM carriers, and though they may contract with GSM cells for roaming in more rural areas, the charge to the customer will generally be significantly higher.

International Roaming: If you need to make calls to other countries, a GSM carrier can offer international roaming, as GSM networks dominate the world market. If you travel to other countries you can even use your GSM cell phone abroad, providing it is a quad-band phone (850/900/1800/1900 MHz). By purchasing a SIM card with minutes and a local number in the country you are visiting, you can make calls against the card to save yourself international roaming charges from your carrier back home. CDMA phones that are not card-enabled do not have this capability, however there are several countries that use CDMA networks. Check with your CDMA provider for your specific requirements.

According CDG.org, CDMA networks support over 270 million subscribers worldwide, while GSM.org tallies up their score at over 1 billion. As CDMA phones become R-UIM enabled and roaming contracts between networks improve, integration of the standards might eventually make differences all but transparent to the consumer.

The chief GSM carriers in the United States are Cingular Wireless, recently merged with AT&T Wireless, and T-Mobile USA. Major CDMA carriers are Sprint PCS, Verizon and Virgin Mobile. There are also several smaller cellular companies on both networks.


source: wisegeek.com
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