What does the term “backorder” mean in requisition management?

The term “backorder” refers to an order that cannot be fulfilled at the current time due to stock unavailability. This situation arises when a customer places an order for an item that is temporarily out of stock but can be supplied later. It indicates that the demand for the item exceeds the available supply, and the business commits to sending the item to the customer once it becomes available again.

This concept is crucial in requisition management as it helps businesses track outstanding orders and informs customers about potential delays, ensuring effective inventory and supply chain management. Understanding backorders is essential for timely customer communication and inventory planning.