A backorder is an order for a good or service that cannot be filled at the current time due to a lack of available supply. The item may not be held in the companys available inventory but could still be in production, or the company may need to manufacture more of the product. Backorders are an indication that demand for a company's product outweighs its supply. They may also be known as the company's backlog.
- A backorder is an order for a good or service that cannot be filled immediately because of a lack of available supply.
- Backorders give insight into a company's inventory management. A manageable backorder with a short turnaround is a net positive, but a large backorder with longer wait times can be problematic.
- Companies with manageable backorders tend to have high demand, while those that can't keep up may lose customers.
