An order for a product that is temporarily out of stock and will be fulfilled when inventory becomes available. This occurs when customer demand exceeds current stock levels, requiring the warehouse to queue the order for future processing once replenishment arrives.
Backorders significantly impact warehouse operations by creating fulfillment delays, affecting customer satisfaction, and requiring careful inventory planning. They also influence storage allocation decisions and picking priorities when stock arrives. Modern WMS platforms automatically track backorder quantities, estimated fulfillment dates, and customer priority levels to optimize processing sequences.
For example, if a customer orders 100 units of a product but only 60 are in stock, the remaining 40 units become a backorder. The WMS will reserve the first 40 units from the next incoming shipment for this customer, ensuring systematic fulfillment. Effective backorder management helps maintain customer relationships while optimizing inventory turnover and reducing carrying costs.
