Backorder is a distribution term that refers to the status of items on a purchase order in the event that some or all of the inventory required to fulfill the order is out of stock. Distribution (or place) is one of the four elements of Marketing mix. A purchase order (PO is a commercial document issued by a Buyer to a seller, indicating the type quantities and agreed prices for products or services This differs from a forward order where stock is available but delivery is postponed for another reason.

Backorder costs include: costs of expediting, loss of customer goodwill and loss of sales revenues.

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