LIFO—Last In, First Outmeans the most recently acquired quantity is treated as the first quantity removed when a partial cancellation occurs. Because the same subscription product was purchased multiple times at different prices, the selected consumption strategy determines which historical purchase price is used to calculate the cancellation credit.

Under LIFO, Revenue Management begins with the latest acquisition lot. The refund or negative adjustment therefore uses the price associated with that most recent purchase before moving backward to earlier lots if additional quantity must be canceled.

Option A describes FIFO, where the oldest acquisition would be canceled first. That would produce a refund using the earliest price rather than the latest. Option B eliminates the individual lot history by averaging prices, which is not the behavior identified by the source.

The concept is closely related to lot-based asset management because Revenue Management can preserve multiple acquisition events and prices within the same customer asset lifecycle.

Study Guide Reference:Asset Management — Partial Cancellations; lot-based pricing; LIFO/FIFO asset consumption strategies.

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