Back Order

Posted in Operations and Supply Chain Terms, Total Reads: 6856

Definition: Back Order

Back Order means an order for any good or service which cannot be fulfilled at the time when it is demanded due to lack of resources such as raw materials, production capacity etc.

An important point to note here is the fact that back orders can only exist if the customer is willing to wait for the order.

Such back orders usually entail a back order cost, which generally refers to the cost that the suppliers pays in order to make the customer wait for his order. Also, the percentage of back order serves as an important measure for a company to measure its effectiveness.

Browse the definition and meaning of more terms similar to Back Order . The Management Dictionary covers over 7000 business concepts from 6 categories. This definition and concept has been researched & authored by our Business Concepts Team members.

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