To rotate stock means to arrange the oldest units in inventory so they are sold before the newer units. For example, a grocery store will restock its shelves by putting the oldest units in the front part of the shelves. The newest units will be placed in the back of the shelves. The hope is that the customer will select the most convenient (older) units from the front of the shelf.
It is important to rotate stock in all areas: retail display area, warehouse, factory, etc. The reason to rotate stock is to reduce the losses from deterioration and obsolescence.