Refers to a customer’s order that cannot be filled when presented and for which the customer is prepared to wait for a period of time.

The item ordered may not be held in the company’s available inventory but could still be in production.

The percentage of items backordered and the number of backorder days represent important measures of the quality of a company’s customer service and the effectiveness of its inventory management.

It can also be an indication that demand outweighs the supply.