The Procurement Glossary » Backorder

Backorder

Inventory & Logistics

Definition

An order (or part of one) that cannot be filled immediately because stock is unavailable, held to be fulfilled when stock arrives.

Explanation

Backorders occur when demand outstrips available inventory. They keep the sale but delay delivery, hurting service and sometimes triggering expediting. A rising backorder level signals fill-rate or supply problems.

Example

With only 80 of 100 units in stock, the remaining 20 go on backorder until the next delivery.

Related terms

• Fill Rate — The percentage of ordered quantity a supplier delivers from stock without shortfall or backorder.
• Stockout — A situation where an item is unavailable because inventory has run out, disrupting operations or sales.
• Safety Stock — Extra inventory held as a buffer against variability in demand or supply, to reduce the risk of stockouts.
• Lead Time — The elapsed time between placing an order and receiving the goods.

Frequently Asked Questions

What is Backorder?

An order (or part of one) that cannot be filled immediately because stock is unavailable, held to be fulfilled when stock arrives. Backorders occur when demand outstrips available inventory. They keep the sale but delay delivery, hurting service and sometimes triggering expediting. A rising backorder level signals fill-rate or supply problems.

Can you give an example of Backorder?

With only 80 of 100 units in stock, the remaining 20 go on backorder until the next delivery.

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