Backorder

AAA

DEFINITION of 'Backorder'

An order for a good or service that cannot be filled at the current time due to a lack of available supply. The higher the number of items backordered, the higher the demand for the item.

INVESTOPEDIA EXPLAINS 'Backorder'

Backorders are an important factor in inventory management analysis. If a company consistently sees items in backorder then this could be taken as a signal that it is running too lean - and that it is losing out on business by not providing the products demanded by its customers.

RELATED TERMS
  1. Average Age Of Inventory

    The average number of days it takes for a firm to sell to consumers ...
  2. Unsold Inventory Index

    A monthly statistic released nationally that details the number ...
  3. Inventory Accounting

    The body of accounting that deals with valuing and accounting ...
  4. Inventory

    The raw materials, work-in-process goods and completely finished ...
  5. Inventory Turnover

    A ratio showing how many times a company's inventory is sold ...
  6. Carrying Cost Of Inventory

    This is the cost a business incurs over a certain period of time, ...
RELATED FAQS
  1. How is minimum transfer price calculated?

    A company that transfers goods between multiple divisions needs to establish a transfer price so that each division can track ... Read Full Answer >>
  2. How is a product line depth related to a product line?

    A company's product line depth is the number of products in the company's product line. Product Line A product line is a ... Read Full Answer >>
  3. What is the effective interest method of amortization?

    The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at ... Read Full Answer >>
  4. How has electronic retailing (e-tailing) changed the consumer discretionary goods ...

    Electronic retailing has changed the consumer discretionary goods sector by increasing price transparency and product information. ... Read Full Answer >>
  5. What does an unfavorable variance indicate to management?

    In managerial accounting, an unfavorable variance is discovered when a company's management performs a comparison between ... Read Full Answer >>
  6. Is there a way to include intangible assets in book-to-market ratio calculations?

    The book-to-market ratio is used in fundamental analysis to identify whether a company's securities are overvalued or undervalued. ... Read Full Answer >>
Related Articles
  1. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  2. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  3. Fundamental Analysis

    Inventory Valuation For Investors: FIFO And LIFO

    We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.
  4. Fundamental Analysis

    Analyzing Retail Stocks

    To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
  5. Economics

    Calculating Net Realizable Value

    An asset’s net realizable value is the amount a company should expect to receive once it sells or disposes of that asset, minus costs from its disposal.
  6. Savings

    The Pros and Cons of Buying on Amazon

    Learn how buying works with Amazon. Amazon has become the dominant player in online retail with its ruthless focus on lower prices and customer service.
  7. Stock Analysis

    Top Investment Ideas for Malls of the Future

    How investors should be thinking about the mall of tomorrow.
  8. Stock Analysis

    Whole Foods: How Will Shares React to Price Probe?

    Why it's important to look beyond the recent headlines about Whole Foods Market and accusations of pricing problems in New York.
  9. Stock Analysis

    What's Worth More: Walmart or Facebook?

    Which company is worth more, Walmart or Facebook? The answer may come as a surprise.
  10. Personal Finance

    Is Etsy The New And Improved Ebay?

    Will Etsy replace Ebay as the place for young, trendy millennials to shop?

You May Also Like

Hot Definitions
  1. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  2. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  3. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  4. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  5. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  6. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!