Backorder: Supply Chain Management

Backorder:

Customer order which cannot be filled now, and for which the customer is prepared to wait for some time. Percentage of items back ordered and the number of back order days are important measures of the quality of a firm’s customer service and the effectiveness of its inventory management.

An unfilled customer order. A backorder is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.

This calculation can vary. Some companies count items that are not confirmed (not allocated) and past the Requested Delivery Date (or Requested Ship Date). Other companies may also count those items with stock confirmed, but past due.

Backorders may be expressed in “pieces”, “SKU’s” or in “value”. Backorder calculations are often tracked at a variety of levels. Example: Customer, Division, Total Company

Aged Backorder: Reports on backorders in past-due time buckets based on the Requested Delivery Date/Requested Ship Date.

An unfilled customer order. A backorder is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.
This calculation can vary. Some companies count items that are not confirmed (not allocated) and past the Requested Delivery Date (or Requested Ship Date). Other companies may also count those items with stock confirmed, but past due.

Backorders may be expressed in “pieces”, “SKU’s” or in “value”. Backorder calculations are often tracked at a variety of levels. Example: Customer, Division, Total Company

Aged Backorder: Reports on backorders in past-due time buckets based on the Requested Delivery Date/Requested Ship Date.

Backorder translate to LOST sales opportunities.

SUPPLY CHAIN MANAGEMENT METRICS