What is a ‘Back Order’
A back order is a customer order that has not been fulfilled. A back order generally indicates that customer demand for a product or service exceeds a company’s capacity to supply it. Total back orders, also known as backlog, may be expressed in terms of units or dollar amount.
Explaining ‘Back Order’
Companies have to walk a fine line in managing their back orders. While consistently high levels of back orders indicate healthy demand for a company’s product or service, there is also a risk that customers will cancel their orders if the waiting period for delivery is too long. This is less of a risk for innovative products with strong brand recognition in areas such as technology.
Further Reading
- Explaining the globalization of financial markets: bringing states back in – www.tandfonline.com [PDF]
- Trends in park tourism: Economics, finance and management – www.tandfonline.com [PDF]
- Whose legitimacy? Islamic finance and the global financial order – www.tandfonline.com [PDF]
- Do financial constraints hold back innovation and growth?: Evidence on the role of public policy – www.sciencedirect.com [PDF]
- Keynes' finance motive – books.google.com [PDF]
