INVENTORY & WAREHOUSE OPERATIONS
Backorder
A backorder is accepted customer demand that remains unfulfilled because the required stock is not currently available for that order.
BACKORDER IN PRACTICE
- Record the shortfall
- Confirm incoming supply
- Allocate & communicate
A WORKED EXAMPLE
30 ordered. 12 still outstanding.
A customer orders 30 units and 18 are available. If the agreed policy permits a partial shipment, 18 can ship and 12 remain on backorder. When 20 eligible units arrive, allocating 12 to this backorder leaves eight for other demand. Avoid creating a second order that duplicates the same outstanding quantity.
WHAT THIS MEANS FOR YOUR QUOTE
Make the requirement explicit
Use the same scope and units when comparing providers. Put the agreed responsibility, included work and exception process into the service description.
A LITTLE MORE CONTEXT
Questions about Backorder
Is a backorder the same as a stockout?
A stockout is an availability condition; a backorder is accepted demand still waiting to be fulfilled.
Must an order ship partially?
No. Partial shipment depends on the customer agreement, channel rules and fulfillment policy.
Source & example notes
Oracle: available-to-promise rules. Further reading on the related controls and terminology. Product documentation describes a particular implementation; it does not establish a universal procedure or service commitment.
Definitions and worked examples are prepared by 3PL Hub. Numbers are illustrative, not provider rates, operating targets or guarantees.
Last updated: · 3PL Hub
