response to following discussion post

LIFO - Last In First Out is the assumption that the last asset sold is the first one used. If inventory is purchased at different times at varying costs, the LIFO system tracks items sold at the last purchase price. This method tracks items sold in a backwards manner and the inventory is subtracted based on its last purchase price. If a company sells bow ties and buys ten bow ties for seven dollars, ten bow ties for twelve dollars and ten bow ties for fourteen dollars, when a bow tie is sold they subtract fourteen dollars then twelve then seven.

FIFO - First In First Out describes inventory that has been sold and tracks to subtle difference between old inventory not necessarily being that which is delivered to a customer. Newer inventory may have been delivered and this is what is sent to a customer.

Weighted Average allows for assets to be given value based on certain attributes. This allows inventory to be more easily tracked and accounted for. All inventory is given a value then the weighted average is determined by diving the number of items by the total value.

Specific Identification is a way of accounting for inventory costs based on the dates of purchase for inventory items. This method is important if each inventory item has a different value. Using the example of bowties - if all bowties are red and of equal value, specific identification wouldn't be necessary. But if each red bow tie is from a different designer and the value of each one varies by hundreds of dollars, specific identification can track this.

Inventory costs are not related to the physical flow of inventory for many reasons. The cost of each item can vary, the value of each item can vary - these subtle differences can impact the physical flow of inventory.