Backorder Management Strategies

6 essential techniques for handling inventory shortfalls

The Merriam-Webster dictionary defines backorder as: “a business order yet to be fulfilled because stock is unavailable“.

For many fulfillment service providers, the definition is even simpler;

“backorder = headaches.”

In most cases, (and there are exceptions) backorders are likely to result in missed opportunities for the client and are therefore to be avoided whenever possible. Fulfillment service providers with proper systems in place can help their clients to avoid the inventory shortfalls that lead to backorders.

This paper describes commonly utilized techniques called “Backorder Treatments” for handling inventory shortages, selective application of “Backorder Treatments”, several additional considerations regarding backorder processing as well as approaches to fulfillment of backorders when inventory becomes available.

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